Tuesday, December 10, 2013

Pre Market Thoughts Wednesday

        ES and NQ Five Day 30 minute charts
 

ES PRE MARKET THOUGHTS


This a sample of how I do my market preparation. The night before I form a hypothesis of how I will approach the day if the market gaps up or down. Preparing the night before takes out all the emotion of possibly considering a trade when the markets open. 
White Lines show the ES Price Level areas I will be paying attention to when considering a trade:

  • 1812
  • 1806.25
  • 1801
  • 1798.5
  • 1795
  • 1787

Day Trading Pre Market Thoughts  

Trend Thoughts: Bearish day but trend continues long with a small range boring day.  The short trend bias is semi-bullish with 1 lower gaps to fill on the ES.

S&P 500 Sectors: Strong Sectors: XLK    Lagging Sectors: XLU Notes:

 


True Range Thoughts ES:  Could be another slow 8-10 point range day tomorrow with some reports due out Thursday.
Reports: none

 
Special Day Thoughts, Trading Day of the Month: 8th trading day of the month, shows no historic bias. December ES is usually the best trading  month for longs * info taken from Stock Market Almanac, provided more for fun than for a day trading bias

Gap Fill Thoughts:   Up Gap: Would consider a trade off Mondays Low if considered resistance, if not will pass not enough of a reward   Down Gap: If price is above 1800 and sitting at support will consider. Notes: If sitting at support/resistance check pre-market to see if price is considered support or Resistance. 

Flat open Thoughts: Pass

Gap and Go Thoughts: Up Gap: Solid up gap over Mondays LOW with support may consider going long at the open. Down Gap: Only if under 1800 then may consider a fade off resistance. Beware of support below and trend up.  Notes: none

Thoughts on Long or Short Setups after 30 Minutes of Trading

(Always evaluate after 30 minutes unless noted)

LONGS

Breakout thoughts for a 15, 30 or 60 minute breakout: Flat to up gap with price over the PP pivot may consider a breakout and pullbacks long to Tuesdays High. Notes:

Fading Long thoughts: In staying with the trend looking for fades off support (false breakdowns) near the price points stated above. Minimum 15-30 minute wait. As always don't fade run away trains if bearish early, let the run play out. Always want to go long with the indexes at support and monitoring the components of the indexes to see if they are in agreement. Notes:

SHORTS

Breakdown thoughts for a 15, 30 or 60 minute breakdown:  Will not consider any breakdowns unless extremely bearish for 30 minutes and below 1800 with volume. Extremely bearish is breaking support levels with a long red 30 minute nasty down bar with volume. 
Will only consider shorting pullbacks with a gap down, price has traded solidly below the PP pivot after 30 minutes, and is considered resistance. If that scenario unfolds then I may consider shorting pullbacks with the 20sma support on light volume provided the bounce is not coming off support with strong volume. Indexes must be working together Notes: Best not short with the market trend up
Fading Short
thoughts:
With a gap down would need a huge gap down and a range over 12 with all the indexes at resistance to consider a fade short.  A run up may target 1811.50 as a fading point. Notes: Always mark Support/Resistance and confluence zones that could be used for targets, fading and breakout/breakdowns.

Always mark Support/Resistance and confluence zones that could be used for targets, fading and breakout/breakdowns.



* You don't have to trade everyday. If the conditions don't feel right or if you're unsure of the current days trading environment then PASS on the trade. Missed money is better than lost money.  Day trading and the stock market is not a "war" that you must win at all cost. Trading should be fun, wait for only the good setups. Follow your rules, stick to your stops, and know that everyday the market presents a new chess board.

 

 


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I DO NOT MAKE RECOMMENDATIONS TO BUY OR SELL SECURITIES - I JUST POST TRADES I MAKE OR FIT THE RULES OF MY TRADING PLAN ON A DAILY BASIS. DO YOUR OWN DUE DILIGENCE - YOU ARE RESPONSIBLE FOR YOUR TRADES, INVESTMENTS, AND DECISIONS! ALL CHARTS COURTESY OF TRADESTATION, SCHWAb & TD AMERITRADE