Tuesday, February 25, 2014

Pre Market Thoughts Wednesday

                                               ES NQ Five Day 60 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.
  • 1856.50
  • 1851
  • 1844
  • 1838.5
  • 1831.50
  • 1827
  • 1823
  • 1821
  • 1819
  • 1810
  • 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 bullish targeting pullbacks to the long side.  Much the same as yesterday. Unfilled gap on the ES sits below to be tested with a break below the trend line. A break above the trend line with volume could trigger a run to test the all-time highs.
  • Longer Term remains in a bullish up trend

Thoughts on the Trading Day and the  Month: 
  • Day: 17th trading day: Historically no bias
  • Month: February ES shows no historical bullish or bearish bias. Weak January's have in the past signaled more bearish times to come.
  • * 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: 10:00 new home sales.

Gap Fill Thoughts: 
  • Up Gap: Will consider fading an UP gap near 1851 and with overnight support.
  • Down Gap: Will consider fading a down gap near 1837/38 and with overnight resistance.
  • Note: Always check pre-market to see if price is considered support or Resistance.

Flat Open:  Pass

Gap and Go Thoughts: 

  • Up Gap: Will pass
  • Down Gap: will not chase a short at the open unless clearly under 1837 with overhead resistance.
  • 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 consider pullbacks at support or breakouts if clearly over 1847 with divergence support (tick support) and volume.

Fading Long thoughts: 
  • Points to  target 1837 and other points mentioned above with divergence.
  • Notes: Prefer a a 5 point plus move into the location

SHORTS

Breakdown/Pullback Short thoughts: Will consider breakdowns and pullbacks if trading under 1837 without increased volume off support.  

Fading Short
thoughts:
 
  • Points to  target 1856 and other points mentioned above with divergence. (over 1846 will stay away from shorting with possible test of highs to come)
  •  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