Saturday, January 11, 2014

Pre Market Thoughts Monday and Weekly Charts

 
ES and NQ Weekly Chart
.
ES NQ Ten Day 30 minute chart

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 Levels and Trend Lines I will be paying attention to when considering a trade: Does not include overnight highs and lows.

  • 1846.50
  • 1838
  • 1834.25
  • 1826.25
  • 1823.25
  • 1818
Trend Thoughts:  
  • Short term is bullish/nuetral and forming a wedge. Targeting pullbacks to the long side. Many unfilled gaps on the ES over the past 2 weeks. Breaking out of this wedge could  be another run to new highs. See Weekly Charts
  • Longer Term remains in a bullish up trend
  • Weekly: NQ and ES remain in bullish channel. 
S&P 500 Sectors: 
  • Strong Sectors:XLV
  • Lagging Sectors:
  • Notes: XLU nice pop on Friday with volume. Lets see if there is a follow through
   
Thoughts on the Trading Day and the  Month: 
  • Day: 8th trading day no historical 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 day trading bias 

Reports: none

Gap Fill Thoughts: 
  • Up Gap: Will pass on fading an up gap.No edge
  • Down Gap: Will consider fading a down gap near 1834.25, and 1829.75 
  • Note: Always check pre-market to see if price is considered support or Resistance.

Flat Open:  pass

Gap and Go Thoughts: 

  • Up Gap: Solid gap with support over 1839 and will consider going long at the open. 
  • Down Gap: will not chase at the open short unless clearly under 1824
  • 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 1839  Notes:

Fading Long thoughts: 
  • Major points to 1834.25, 1829.75, and 1826.50,  at there first test
    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 1829.25 without a strong bounce off support. Notes:    

Fading Short
thoughts:
 
  • Make consider R2 with divergence. May consider other points mentioned above with divergence. Must be careful with rising wedge to short and may be best pass.
  •  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.

 

 


No comments:

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