Wednesday, January 15, 2014

Pre Market Thoughts and Plan for Thursday


                                               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.
  • 1846.50
  • 1838
  • 1834.25
  • 1833
  • 1826.25
  • 1821.50
  • 1817.50
  • 1802.25
  • 1800
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 neutral/bullish targeting pullbacks to the long side. My guess is a break up tomorrow wont hold, need some more consolidation to build energy for a more sustained run. ES has a few lower open gaps to fill. Bernake speaks at 11:15.
  • Longer Term remains in a bullish up trend
S&P 500 Sectors: 
  • Strong Sectors:   
  • Lagging Sectors: XLU, XLE
  • Notes: 
   
Thoughts on the Trading Day and the  Month: 
  • Day:11th trading day: Historically Bullish
  • 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: 8:30 Core Cpi and UE claims, 10:00 Philly Fed, 11:15 Bernake Speaks

Gap Fill Thoughts: 
  • Up Gap: Will consider fading an UP gap near 1845.75 and R2 with overnight trading supporting the trade as resistance.
  • Down Gap: Will consider fading a down gap near 1836.50/  1837.50 area
  • Note: Always check pre-market to see if price is considered support or Resistance.

Flat Open:  pass

Gap and Go Thoughts: 

  • Up Gap: Will not chase
  • Down Gap: will not chase a short at the open. While a gap under Wednesday's low could run, there is too much support to risk a trade.
  • 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 yesterdays high. Will not chase any other breakouts but will consider pullbacks at support if clearly over 1846. Notes:

Fading Long thoughts: 
  • Points to target 1836.50 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 if trading under 1836.50 without a strong bounce off support. Notes:    

Fading Short
thoughts:
 
  • Points to  target 1845.75, R2 and other points mentioned above with divergence.
  •  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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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