Sunday, January 26, 2014

Pre Market Plan Monday and Weekly Charts

ES weekly Chart

NQ weekly Chart

                                               ES Five Day 30 minute chart
Support and Resistance Key. White Lines: multi price levels and trend lines, Yellow Lines: daily chart major price points, Solid Green/Red Lines: prior day high and lows,  Dotted Green/Red lines: pivot points, Light Blue Lines: prior unfilled gaps. Does not include overnight highs and lows. Price Points to watch.
  • 1826.75
  • 1818
  • 1816
  • 1809.50
  • 1800
  • 1771
  • 1760.50
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.
 
Trend Thoughts:  
  • Short term is bearish and extended to the down side. While another sell off could occur watch out for snap back rally. Don't get too anxious in searching for shorts. Coming up on some major support levels on the daily chart. 
  • Longer Term remains in a bullish up trend, don't start chasing shorts. See those weekly charts which are still in a bullish up channel. 
S&P 500 Sectors: 
  • Strong Sectors: 
  • Lagging Sectors: XLB
  • Notes: 
   
Thoughts on the Trading Day and the  Month: 
  • Day: 17th trading day: Historically has no bias
  • Month: January ES is historical a positive month and barometer for the year. Every down January since 1950 preceded a new bear market
  • * Information taken from Stock Market Almanac and provided more for fun and not as a trading bias. (Trading Day 1, 2, 9, 10, 11, 19, 20 historically bullish. Trading Day 5, 14, 16  historically bearish.)

Reports: 10:00AM new home sales

Gap Fill Thoughts: 
  • Up Gap: Will consider fading an UP gap under 1791.50 with  overnight resistance.
  • Down Gap: Will consider fading a down gap near 1771 with overnight support.
  • Note:  Monday could be crazy early on may be best to sit out the open.     Always check pre-market to see if price is considered support or Resistance.

Flat Open:  pass

Gap and Go Thoughts: 

  • Up Gap: May consider if clearly over 1791.50 and is considered support.
  • Down Gap: will not chase a short at the open
  • Note: Always check pre-market to see if price is considered support or Resistance.

Long or Short's to Consider after 15 Minutes

LONGS

Breakout/Pullback Long thoughts Will consider BO's or pullbacks on a down gap coming strong off support with room to resistance. Will consider breakouts and pullbacks at support with an up gap that holds its gap after 15 minutes. In search of the snap back short cover rally. Notes:

Fading Long thoughts: 
  • Points to  target 1771 and 1760.50 and other points mentioned above with divergence.
  • Notes: Prefer a a 5 point plus move into the location

SHORTS

Breakdown/Pullback Short thoughts: Will pass on breakdowns, may consider short pullbacks to resistance and trading under 1791.50 without a strong bounce off support. Notes:   watch out for snap back rally

Fading Short
thoughts:
 
  • Points to  target 1791.50 and other points mentioned above with divergence. If running strong after 30 minutes will not short anything.
  •  Notes: Prefer a a 5 point plus move into the location

Always study the overnight trading and mark Support/Resistance and confluence zones that could be used for targets, fading, pullbacks 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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Disclaimer

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