Thursday, December 5, 2013

Pre Markets Thoughts Friday

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 neutral to which I turn to  the short term trend  which is still in a down move. NQ still above the 10SMA and the in reality this is still only a pullback. Looking for trades off support and resistance and sticking with the short term trend. Will  not short outside the short term trend range. A break above the trend could run back to retest the yearly highs.

 S&P 500 Sectors: Strongest Sectors:  XLK   Weakest Sectors:  XLF XLP Notes:

True Range Thoughts ES:  Break of the range 14-18. Trading in the short term range 9-12 points

Reports: 8:30 UE rate   9:55 Consumer Sentiment

Special Day Thoughts, Trading Day of the Month: 5th trading day of the month and Friday. Inside trading day on the 3 indexes.

Gap Fill Thoughts: Up Gap: may consider if below the R1 and resistance.  Down Gap: May consider if above the S1 and support. 
 
Gap and Go Thoughts: Up Gap: Solid up gap over the R1 pivot with support may consider going long at the open. Down Gap: If under last Wednesdays low, then may consider going short with a fade off resistance.   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.  Notes:

Fading Long thoughts: Long fades off multi support area's (false breakdowns) near the price points stated above. I want all 3 index's in agreement at some type of support. 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 favor more pullbacks to resistance than entering at a breakdown point. Must be aware of support levels. Pullbacks on light volume provided the bounce is not coming off support with strong above average volume. Indexes must be working together Notes: Will not short outside this channel


Fading Short
thoughts:
Will not fade a gap up that holds its gap. May consider fading 1799.50 with an extended range. Will consider 1782 and 1786 with a gap down after 30 minutes and with all 3 indexes at resistance.

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