Wednesday, December 4, 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:

  • 1807
  • 1801.25
  • 1799
  • 1795
  • 1787

Day Trading Pre Market Thoughts  

Trend Thoughts: Trend is long while the short term trend is still in a down move. Still looking for fades off support and a break above the trend could run back to retest the yearly highs.

S&P 500 Sectors: Strong Sectors: XLK    Lagging Sectors: XLU and XLE Notes: XLU looks to have a short term support.

True Range Thoughts ES:  21.5 today and expansion was due. May see range pullback to 10-15 points:

Reports: 8:30 UE claims

Special Day Thoughts, Trading Day of the Month: 4th trading day of the month.Usually last day of monthly in flows.

Gap Fill Thoughts:   Up Gap: May consider if under 1795 with resistance   Down Gap: If price is above S1 and at support may consider long,  Notes: If sitting at support/resistance check pre-market to see if price is considered support or Resistance. 

Flat Open: Small down gap at the PP may consider with a run to the highs of Wednesday. Would need support to enter. 

Gap and Go Thoughts: Up Gap: A solid gap over Wednesdays highs and may consider a run at the open Down Gap: Gap clearly under Wednesday low, and not at support, may consider to run low.   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: Will consider BO's or pullbacks with a gap up that holds its gap or gap down and a strong bounce off support or break out of the short term down trend  Notes:

Fading Long thoughts: In staying with the trend looking for fades off support (false breakdowns) near the price points stated above at the bottom short term range or after extended True range. Minimum 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  a gap down under Wednesday Low and bearish or extremely bearish for 30 minutes and trading below Wednesday low with volume. Extremely bearish is breaking support levels with a long red 30 minute nasty down bar with volume. If that scenario unfolds then I may consider shorting pullbacks 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:
Will not fade a gap up that holds its gap. May consider fading 1794, 1801, 1806, 1811 area if all 3 indexes at resistance and the ES has had a range of at least 10 points.

Will not fade a bounce off support with strong volume. Always want to short with the indexes at resistance and monitoring the components of the indexes to see if they are in agreement. 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