Sunday, April 27, 2014

Monday Pre Market Thoughts and Weekly Charts

Weekly Chart

                                           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.
  • 1878
  • 1868
  • 1865
  • 1856.50
  • 1853
  • 1850.25
  • 1840.25
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 to bearish targeting pullbacks to the long side and shorting multiple resistance points. Will not chase shorts unless the setup/odds favor the trade. Unfilled gap on the ES to the upside.
  • Longer Term remains in a bullish up trend. Weekly charts show the price sits in middle of their long term up channel. Major support sits below before a run to the down side of the channel. 1900 on the ES presents resistance and we could retest at some point.

Thoughts on the Trading Day and the  Month: 
  • Day: 17th trading day: Historically neutral
  • Month: April has been the best DOW month. Past has shown to be a solid steady month. End of month weakness after tax deadline.
  • * 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 AM Pending Home Sales

Gap Fill Thoughts: 
  • Up Gap: Will consider fading an UP gap near 1863/65with overnight support.
  • Down Gap: Will consider fading a down gap near 1856.5 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: May consider if clearly over 1868 and with overnight support.
  • Down Gap: will not chase a short at the open unless clearly under 1850 with overnight 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 pullbacks at support or breakouts if clearly over 1860.25 with divergent support (above average volume and trending TICKS)Will consider BO's or pullbacks on a down gap coming strong off support with room to resistance.

Fading Long thoughts: 
  • Points to  target 1853 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 1856 without increased volume off support.  

Fading Short
thoughts:
 
  • Points to  target 1864 and 1868 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