Tuesday, March 4, 2014

Pre Market Thoughts Wednesday

ES/NQ Ten 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.
  • 1874.75
  • 1866
  • 1862
  • 1856.50
  • 1849.5
  • 1845
  • 1838.5
  • 1837.50
  • 1832.50
  • 1823
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.  Will not chase shorts unless the setup/odds favor the trade. Unfilled gap on the ES to the downside.
  • Longer Term remains in a bullish up trend

Thoughts on the Trading Day and the  Month: 
  • Day: 3rd trading day: Historically Bullish
  • Month: March has shown Mid month strength and end of month weakness. This has been the theme of March  over the past 5 years. Historically the 3rd best month for the ES.
  • * 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: 8:15 ADP and 10:00 ISM non manufactoring

Gap Fill Thoughts: 
  • Up Gap: Will consider fading an UP gap near 1874 with overnight support.
  • Down Gap: Will consider fading a down gap near 1867 with overnight resistance.
  • Note: Always check pre-market to see if price is considered support or Resistance.

Flat Open:  May consider with a flat open and slow over night action. 

Gap and Go Thoughts: 

  • Up Gap: Will Pass
  • 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 pullbacks at support or breakouts if clearly over gap fill with divergent support (above average volume and trending TICKS) and room to yesterdays high. Will consider BO's or pullbacks on a down gap coming strong off support with room to resistance.

Fading Long thoughts: 
  • Points to  target 1862 and other points mentioned above with TICK divergence and average volume.
  • Notes: Prefer a a 5 point plus move into the location

SHORTS

Breakdown/Pullback Short thoughts: Will consider breakdowns and pullbacks if trading under 1862 without increased volume off support.  

Fading Short
thoughts:
 
  • Points to  target 1874.50 and other points mentioned above with TICK divergence and average volume.
  •  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