I will be purchasing them Monday morning, providing the proper environment exists.
When you see them listed in the trading account on the blog, I will use the days closing price for reference and not the actual fill prices.
Saturday, November 10, 2007
Three Strong Aggressive Picks
The three stocks below will all be going into the Aggressive Stock Trading Account.
I will be purchasing them Monday morning, providing the proper environment exists.
When you see them listed in the trading account on the blog, I will use the days closing price for reference and not the actual fill prices.
I will be purchasing them Monday morning, providing the proper environment exists.
When you see them listed in the trading account on the blog, I will use the days closing price for reference and not the actual fill prices.
Weekend Equity Market Comment - 11/10/2007
The probability model missed on the outcome of Friday, but I will give it the benefit of the doubt considering how incredibly accurate it has been over the last 60 days. I don't want to jinx the model, but it seems like the tune up I gave it really brought consistency to its abilities.
The model is giving very strong readings to this decline being just about over. As a matter of fact it calls for a low to be put into place Monday in the early morning at the 1444-1447 area on the Cash S&P 500 so watch that level very carefully. If you want to get micro about it, the model calls for a flat to higher open followed by one more push lower, with the low coming in from 10:00 to 11:00 and then clear sailing up with a close from 12-22 points higher. Now I realize that this is just a tad micro, but I do use the general hourly readings it gives me. I don't treat them as gospel, but it will give you a nice general framework from which you can base some of your day trading decisions.
If in fact the model is on target, then this low would classify as an intermediate term turning point and we should look for higher prices from there and as I stated on Thursday, the model did shift to buy weakness.
With this in mind, I will be picking up some short term long positions on the early weakness Monday and they will be placed into the Aggressive Trading Account on the blog. Whenever I post new additions or removals from the portfolio I always use that days closing price and not the price of the actual fill. This way in most instances it makes the account work even harder to perform well and I always like to have some of the deck stacked against me, it helps to confirm whether or not a specific strategy is worth a hoot or not.
I would like to mention that the probability model did return the possibility of an intermediate term low on Tuesday, but it was a rather remote possibility in relation to the typical readings the model gives. It never hurts to be too prepared though and so I mention it.
Have a great weekend and lets all have a profitable trading week ahead!
The model is giving very strong readings to this decline being just about over. As a matter of fact it calls for a low to be put into place Monday in the early morning at the 1444-1447 area on the Cash S&P 500 so watch that level very carefully. If you want to get micro about it, the model calls for a flat to higher open followed by one more push lower, with the low coming in from 10:00 to 11:00 and then clear sailing up with a close from 12-22 points higher. Now I realize that this is just a tad micro, but I do use the general hourly readings it gives me. I don't treat them as gospel, but it will give you a nice general framework from which you can base some of your day trading decisions.
If in fact the model is on target, then this low would classify as an intermediate term turning point and we should look for higher prices from there and as I stated on Thursday, the model did shift to buy weakness.
With this in mind, I will be picking up some short term long positions on the early weakness Monday and they will be placed into the Aggressive Trading Account on the blog. Whenever I post new additions or removals from the portfolio I always use that days closing price and not the price of the actual fill. This way in most instances it makes the account work even harder to perform well and I always like to have some of the deck stacked against me, it helps to confirm whether or not a specific strategy is worth a hoot or not.
I would like to mention that the probability model did return the possibility of an intermediate term low on Tuesday, but it was a rather remote possibility in relation to the typical readings the model gives. It never hurts to be too prepared though and so I mention it.
Have a great weekend and lets all have a profitable trading week ahead!
Friday, November 9, 2007
Equity Market Comment Part I.......11/9/07
The probability model was off today, as it had called for a continuation of the rally phase from Thursday. The odds of what we saw today were only 15% according to the model, but was the market wrong? Fat Chance, the market is never wrong...... PERIOD!
It was an excellent day for day trading and while at times it was a bit of a challenge, we did manage to capture a bit over 19 points on the S&P 500.
I will be doing my work this weekend and not tonight. I am going to take a night off and enjoy the fruits of my labors this week.
Look for the equity market comment on Saturday night, unless I decide to take Saturday off too! : )
Lets hope next week was as productive on the day trading as this week was and also I would like to see the commodity positions start to pick up a little steam as well.
Have a great couple of days and I will post again either Saturday or Sunday, but either way it will be in time for the open on Monday.
It was an excellent day for day trading and while at times it was a bit of a challenge, we did manage to capture a bit over 19 points on the S&P 500.
I will be doing my work this weekend and not tonight. I am going to take a night off and enjoy the fruits of my labors this week.
Look for the equity market comment on Saturday night, unless I decide to take Saturday off too! : )
Lets hope next week was as productive on the day trading as this week was and also I would like to see the commodity positions start to pick up a little steam as well.
Have a great couple of days and I will post again either Saturday or Sunday, but either way it will be in time for the open on Monday.
Intra-Day Update Stopped out
We are stopped out with the move through 1460.
Got 9 points out of the deal so not to shabby!
Looking for a pullback to 1455-1456.
Got 9 points out of the deal so not to shabby!
Looking for a pullback to 1455-1456.
Intra-Day Update
Move the stop 10 1451 as it looks like they might push it lower for yet another new low for the day. 1451 will be about a 1/2 point loss
Intra-Day Update
Well, so much for the 50% level!
We made a nominal new low and stabalized a bit, so while this is EXTREMELY Aggressive I am going to fade the open here and buy long.
I am keep a very close stop right under todays low.
I stress that this is very aggressive!
We made a nominal new low and stabalized a bit, so while this is EXTREMELY Aggressive I am going to fade the open here and buy long.
I am keep a very close stop right under todays low.
I stress that this is very aggressive!
11/9/07 Pre-Opening Comment
Well it looks like the market is going to get hit fairly hard at the open, perhaps 14-16 S&P points.
So now an assessment needs to be made as to whether or not this is simply a correction
from the low made yesterday.
The 50% level comes in right in the area of 14-16 points lower so I am leaning towards fading this opening (going long) after it settles down a bit and seeing if the market can at least fill the gap.
So now an assessment needs to be made as to whether or not this is simply a correction
from the low made yesterday.
The 50% level comes in right in the area of 14-16 points lower so I am leaning towards fading this opening (going long) after it settles down a bit and seeing if the market can at least fill the gap.
Thursday, November 8, 2007
NEW COMMODITY SCALPER TRADE
New signal today in December Cotton.
We are Short December Cotton from the close today, with a stop at 65.80
Check the Scalper Section on the side of the blog every night.
If there is a potential candidate it will be there.
The most recent is to short the Dec. 10 year T-note if the high of today is not surpassed tomorrow.
We are Short December Cotton from the close today, with a stop at 65.80
Check the Scalper Section on the side of the blog every night.
If there is a potential candidate it will be there.
The most recent is to short the Dec. 10 year T-note if the high of today is not surpassed tomorrow.
Aggressive Trading Account - Only 1 Position Remains
Aggressive Trading account covered all except one of the short positions.
I simply did not have the time to go long any stocks in that account today with how quickly the market was moving and the attention needed to the Day trading.
I will begin to add long positions of stocks I think have some great short term upside potential.
I have a preliminary list of candidates, now all I have to do is find the best ones.
The vast majority of the short trades in the account did very well with the exception of a few that I simply let run against me to long.
I will be updating the closed positions numbers tonight or tomorrow.
I simply did not have the time to go long any stocks in that account today with how quickly the market was moving and the attention needed to the Day trading.
I will begin to add long positions of stocks I think have some great short term upside potential.
I have a preliminary list of candidates, now all I have to do is find the best ones.
The vast majority of the short trades in the account did very well with the exception of a few that I simply let run against me to long.
I will be updating the closed positions numbers tonight or tomorrow.
Daily Equity Market Comment - 11/8/07
The probability model hit it on the nose yet again with the early weakness and the reversal to the upside. The only thing it missed on was that the close was supposed to be unchanged to mildly positive, but for our purposes it came through like a champ.
The Day Trading Account captured 21 points today and you really can chalk much of that up to following the probability study. It is always so much easier when you have some type of guide post as the day develops.
It looks to me like today produced a selling climax on an intermediate term basis. This could be seen very clearly on the one minute chart as you could literally feel the panic in the selling.
The probability model calls for a shift from selling strength to buying weakness on an intermediate term basis only. It also calls for the market to continue its rally on Friday with a flat to slightly higher open.
The question from here is whether or not this is the end of the intermediate term decline or is there more to come. I would side with the more to come, but as always, let the market tell its story and we will see if we can decipher the meaning.
The Day Trading Account captured 21 points today and you really can chalk much of that up to following the probability study. It is always so much easier when you have some type of guide post as the day develops.
It looks to me like today produced a selling climax on an intermediate term basis. This could be seen very clearly on the one minute chart as you could literally feel the panic in the selling.
The probability model calls for a shift from selling strength to buying weakness on an intermediate term basis only. It also calls for the market to continue its rally on Friday with a flat to slightly higher open.
The question from here is whether or not this is the end of the intermediate term decline or is there more to come. I would side with the more to come, but as always, let the market tell its story and we will see if we can decipher the meaning.
Interim Equity Market Update For Position Traders
An area to keep an eye on basis the S&P 500 cash index is 1458-1462.
This area could very well mark an intermediate term low at which time
position traders might want to consider long positions.
Remember, the probability model is calling for sharply lower prices today followed by a reversal to the upside.
Of course we will have to take a look at what is going on in the market if and when we achieve these targets, but keep a heads up.
This area could very well mark an intermediate term low at which time
position traders might want to consider long positions.
Remember, the probability model is calling for sharply lower prices today followed by a reversal to the upside.
Of course we will have to take a look at what is going on in the market if and when we achieve these targets, but keep a heads up.
Intra-Day Update
The 5 minute chart is starting to look constructive on the long side and with the quick penetration of the lows and a rally back above we may have just put in a short term low.
My concern however is that the triangle pattern that we went short off of has not satisfied its downside target which is quite a bit lower at 1461-1462.
So until things clear up a little more I will stand aside.
WHEN IN DOUBT.......STAY OUT!!!
My concern however is that the triangle pattern that we went short off of has not satisfied its downside target which is quite a bit lower at 1461-1462.
So until things clear up a little more I will stand aside.
WHEN IN DOUBT.......STAY OUT!!!
Stopped Out
Stopped out of short with 2 1/2 points profit.
I may look to sell the market again if we are able to take out the double bottom today.
Right now the S&P just seems to be playing with the Pivot Point.
I may look to sell the market again if we are able to take out the double bottom today.
Right now the S&P just seems to be playing with the Pivot Point.
Intra-Day Update - Lock In Profits
We have 5 points of profit on the short sale.
Move your stop to lock in 2 1/2 points and if the market continues to move lower
trail your stop always trying to keep it 2.5 points above current levels.
Move your stop to lock in 2 1/2 points and if the market continues to move lower
trail your stop always trying to keep it 2.5 points above current levels.
Move Stop To Break Even
Move stop to break even on the short which is 1475 even, basis the Cash S&P 500
Intra-Day Update - 11/8/07
Coil broke the lower line, so we are short.
I am keeping my stop very close however as price seems to have stalled right under the pattern. This usually is NOT a good sign for our position. I will give it some room to breathe, but I also will not be that far away to get hurt.
I am keeping my stop very close however as price seems to have stalled right under the pattern. This usually is NOT a good sign for our position. I will give it some room to breathe, but I also will not be that far away to get hurt.
Intra-Day Update - 11/8
Look to go Long or Short on the break of the Coil on the chart.
Use the blue lines as your reference, not the green line.
Keep a close stop!
Use the blue lines as your reference, not the green line.
Keep a close stop!
Wednesday, November 7, 2007
MASTER PIVOT POINTS
Everyday, I am going to post the one minute chart of the S&P 500 cash index with the Pivot Points on the chart so you can print them out to use in your studies.
Trust me on this one, studying these points and the relationship of price as well as the behavior of price will be well worth the effort put forth.
Trust me on this one, studying these points and the relationship of price as well as the behavior of price will be well worth the effort put forth.
Commodity Trade Update - Soy Meal
Three new positions in the commodity trading account today.
Out of the three, the Soybean Meal has the highest probability.
Notice the wide spread smart money selling (Blue Line) and the outside day (Higher High, Lower Low). The outside day pattern in the Meal has a high probability of forecasting lower prices.
While I am being quite aggressive with my exposure to the grains, it is looking more and more to me that the entire complex wants to work lower!
We do need a sharply lower day in the next couple of days here to really confirm the change in trend. Without this confirmation I will have to square my positions, lick my wounds and wait for Cotton!
Out of the three, the Soybean Meal has the highest probability.
Notice the wide spread smart money selling (Blue Line) and the outside day (Higher High, Lower Low). The outside day pattern in the Meal has a high probability of forecasting lower prices.
While I am being quite aggressive with my exposure to the grains, it is looking more and more to me that the entire complex wants to work lower!
We do need a sharply lower day in the next couple of days here to really confirm the change in trend. Without this confirmation I will have to square my positions, lick my wounds and wait for Cotton!
Daily Equity Market Comment - 11/7/07
The probability model really hit today on the head and although I struggled early in the Day Trading trying to fade the open, I was able to capture 8 1/2 points on the S&P 500 thanks to the last hour of trading. Before the last hour I was behind the eight ball by 4 1/2 points which alone is hard to believe considering the magnitude of the decline, but sometimes it goes your way and other times it just doesn't seem like you can do anything right. This is how the first half of the day went, but I was rescued by the position I put on in the last hour.
Well enough of the details of the trading day, lets get on with the meat!
The probability study calls for a continuation of the sharply lower prices, but there is actually a bright side to this outcome. The model also calls for a sharp recovery from the lower prices, which if it pans out should offer some great trade opportunities.
The intermediate term seems to be playing out pretty much in line with our expectations. The time frame is a bit off, but price is reacting almost to a script.
Price targets for this leg down are still quite a ways away from current prices. First target comes in at 1458 on the S&P 500 cash and there is also a target all the way down at 1420.
The breaking of 1490 on the cash index seems to have been the straw that broke the camels back and it seems there is more to come.
Keep your core positions hedged and lets await some type of intermediate term low to make a call as to whether or not the decline is over. I will tell you one thing..... The Put Call ratio continues to dictate that much lower prices are in the offing. The market was down more than 360 points today and the Put/Call ratio stood at 1.06!!!! It should have been at 2.10 or higher to even hint that a low was in the making.
We will continue to take things one day at a time and see what the market offers us.
Well enough of the details of the trading day, lets get on with the meat!
The probability study calls for a continuation of the sharply lower prices, but there is actually a bright side to this outcome. The model also calls for a sharp recovery from the lower prices, which if it pans out should offer some great trade opportunities.
The intermediate term seems to be playing out pretty much in line with our expectations. The time frame is a bit off, but price is reacting almost to a script.
Price targets for this leg down are still quite a ways away from current prices. First target comes in at 1458 on the S&P 500 cash and there is also a target all the way down at 1420.
The breaking of 1490 on the cash index seems to have been the straw that broke the camels back and it seems there is more to come.
Keep your core positions hedged and lets await some type of intermediate term low to make a call as to whether or not the decline is over. I will tell you one thing..... The Put Call ratio continues to dictate that much lower prices are in the offing. The market was down more than 360 points today and the Put/Call ratio stood at 1.06!!!! It should have been at 2.10 or higher to even hint that a low was in the making.
We will continue to take things one day at a time and see what the market offers us.
Intra-Day Update - Stopped Out
Talk about a quick trade!
Stopped out again with a 1 3/4 point loss.
So far today we are down 4 1/4 points.
S&P is currently tracing out a diagonal triangle, so I will be looking to get back long on
a break of the pattern.
Stopped out again with a 1 3/4 point loss.
So far today we are down 4 1/4 points.
S&P is currently tracing out a diagonal triangle, so I will be looking to get back long on
a break of the pattern.
Intra-Day Update - Back Long
We are back on the long side at 1498.50, with a very tight stop at 1496.75.
If the upside move is going to occur, it should happen in short order.
This means a close stop and if it stalls then we are out!
If the upside move is going to occur, it should happen in short order.
This means a close stop and if it stalls then we are out!
Intra-Day Update - Stopped Out at 1502
Stopped out at Break Even.
We are down 2 1/2 S&P 500 points on the day.
We are down 2 1/2 S&P 500 points on the day.
Intra-Day Update - Keep The Stop Close
This thing is just not acting right.
It is really starting to act like it wants to break lower.
Keep your stop close at 1502 even and I might even entertain a short position if the lows are taken out.
As it stands now, we are still long, with the stop at break even, which they have come down to three times now and held!
When the market gets quiet like this it always makes me nervous with my position regardless of which side of the fence I am on.
It is really starting to act like it wants to break lower.
Keep your stop close at 1502 even and I might even entertain a short position if the lows are taken out.
As it stands now, we are still long, with the stop at break even, which they have come down to three times now and held!
When the market gets quiet like this it always makes me nervous with my position regardless of which side of the fence I am on.
Intra-Day Updaye - Move Stop To Breakeven
Move stop to break even at 1502 basis the Cash S&P 500.
As usual, move the stop for each 2 1/2 points we get on our side.
As usual, move the stop for each 2 1/2 points we get on our side.
Intra-Day Update
With the move to a nominal new low for the day, we are long from 1502 with a tight stop
just under the lows for the day.
I tried in vain to load a chart for this post, but to no avail.
Intra-Day Update
Took a 2 1/2 point loss on the long position established at 1506.10.
I am thinking that the market will be taken down one more time, perhaps take out the low by 2 or 3 points and then we can look to get back long.
The TRIN is simply to strong for a market down as hard as we are to ignore.
I think you will see a strong reversal, but time will tell.
I am thinking that the market will be taken down one more time, perhaps take out the low by 2 or 3 points and then we can look to get back long.
The TRIN is simply to strong for a market down as hard as we are to ignore.
I think you will see a strong reversal, but time will tell.
Intra-Day Update - Pivot Points
Enter the Pivot Points once again.
A break and hold above these two points should send the market sharply higher.
A break and hold above these two points should send the market sharply higher.
Opening Comment - 11/7/2007
Globex futures are down sharply so look for an ugly opening.
Depending upon how bearish the tape is about 5 minutes after the open I will look
to fade the open in the 1503-1505 area basis the Cash S&P 500. I don't know if the market
will give the entire gap back but it seems to be a strong trend as of late.
If the tape is extremely bearish on the open and going through the first half an hour then I doubt if I will try and play the gap fill.
If the market does fill its gap then look for sharply lower prices yet again, with the lows of the day violated.
Today could pan out to be a great Day Trading Day!
Depending upon how bearish the tape is about 5 minutes after the open I will look
to fade the open in the 1503-1505 area basis the Cash S&P 500. I don't know if the market
will give the entire gap back but it seems to be a strong trend as of late.
If the tape is extremely bearish on the open and going through the first half an hour then I doubt if I will try and play the gap fill.
If the market does fill its gap then look for sharply lower prices yet again, with the lows of the day violated.
Today could pan out to be a great Day Trading Day!
Tuesday, November 6, 2007
Classic Example Of A Bear Market
Is there any floor under the price of Hogs?
Sure there is and according to the smart money, it still has not hit it yet.
Extended declines like this are great to trade once a reflex rally begins.
The reflex is often times very sharp and fast and offers some serious profit potential.
Once we see that the Commercial Traders have started to think that Hogs are cheap then we can start to think about getting long.
This market also offers some excellent instructional value of exactly what a take no prisoners bear market is all about. It is worthy of a print out and careful study, not to mention a place in your educational modules!
Sure there is and according to the smart money, it still has not hit it yet.
Extended declines like this are great to trade once a reflex rally begins.
The reflex is often times very sharp and fast and offers some serious profit potential.
Once we see that the Commercial Traders have started to think that Hogs are cheap then we can start to think about getting long.
This market also offers some excellent instructional value of exactly what a take no prisoners bear market is all about. It is worthy of a print out and careful study, not to mention a place in your educational modules!
A Big Move In Cotton Is Right Around The Corner
I had talked earlier about the Triangle inside a Triangle pattern and the bearish implications it tends to forecast.
Notice also that the Bollinger Bands are really starting to squeeze together and this tells us that volatility is about to enter the market.
The combination of the Bollinger Bands, The Triangle within a Triangle and the Commercial Traders leaning so heavily on the Short side causes me to embrace a breakout to the downside.
The really important thing to remember here is that Cotton is about to make a sizable move and we do not know 100% which way that move will be, but we know it is on its way. So embrace either breakout of the triangle knowing that the ensuing move can easily produce 400% plus on your initial margin.
It is exactly these kinds of set-ups that we as speculators wait for as they are very high probability and they trend for an extended period of time. These types of set-ups can contribute as much as 20% of our yearly trading profits if the commodity is traded correctly.
Keep close tabs on this one as I see the move starting sooner rather than later.
As always, use a protective stop on all of your positions and never take on more leverage than your trading account can handle.
Notice also that the Bollinger Bands are really starting to squeeze together and this tells us that volatility is about to enter the market.
The combination of the Bollinger Bands, The Triangle within a Triangle and the Commercial Traders leaning so heavily on the Short side causes me to embrace a breakout to the downside.
The really important thing to remember here is that Cotton is about to make a sizable move and we do not know 100% which way that move will be, but we know it is on its way. So embrace either breakout of the triangle knowing that the ensuing move can easily produce 400% plus on your initial margin.
It is exactly these kinds of set-ups that we as speculators wait for as they are very high probability and they trend for an extended period of time. These types of set-ups can contribute as much as 20% of our yearly trading profits if the commodity is traded correctly.
Keep close tabs on this one as I see the move starting sooner rather than later.
As always, use a protective stop on all of your positions and never take on more leverage than your trading account can handle.
Aggressive Equity Account Reaches Milestone
The Aggressive Equity Account reached a milestone today with a total Return On Investment of over 100%! This being done since August 1 2007, which I am also very pleased of.
The account has had 15 winning trades and 11 losers, with one break even.
The reason the account has done so well is in part due to the fact that I pull out all the stops on what I am allowed to do. It is very very aggressive and certainly not for the faint of heart.
No question that the capital that is allocated to this account has to be money that if it evaporated tomorrow it would pose no problems at all.
The account is allowed to:
Buy Long
Sell Short
Average Down Losing Positions
Average Up Winning Positions
It also adheres to a strict 17% stop loss rule. This is on a closing basis only.
This is why you will see some losses more than 17% in the transaction history.
To protect against a run away stock I do employ a 25% intra-day stop rule.
Take a look at it sometime, I think for the aggressive minded it offers some excellent returns.
With all that being said I hope I did not just Jinx Myself! : )
The account has had 15 winning trades and 11 losers, with one break even.
The reason the account has done so well is in part due to the fact that I pull out all the stops on what I am allowed to do. It is very very aggressive and certainly not for the faint of heart.
No question that the capital that is allocated to this account has to be money that if it evaporated tomorrow it would pose no problems at all.
The account is allowed to:
Buy Long
Sell Short
Average Down Losing Positions
Average Up Winning Positions
It also adheres to a strict 17% stop loss rule. This is on a closing basis only.
This is why you will see some losses more than 17% in the transaction history.
To protect against a run away stock I do employ a 25% intra-day stop rule.
Take a look at it sometime, I think for the aggressive minded it offers some excellent returns.
With all that being said I hope I did not just Jinx Myself! : )
Daily Equity Market Comment - 11-6-07
The probability model hit today pretty well as it called for sharply higher prices.
While it took a while for the market to make up its mind which way it wanted to go today, once it made its commitment it really never looked back.
Day Trading today brought in 5 1/4 points, but 6 of those points were off the fade from the open and I did not have an Internet feed at the time thus I was unable to send the signals real time. The only real time trade today was a short for a 3/4 point loss.
The probability model for tomorrow goes both ways, but says that within the first 1/2 hour we will know which outcome is most probable.
The model calls for another stellar move higher, but if this is to hold true then the open tomorrow must be within 3 ticks of the low and the market should start very strong right out of the gate.
The other side of the model calls for sharply lower prices for the day, with a key reversal after the market rallies to the 62% retrace level, which would be about 8 S&P points from current levels.
So while the model is generating mixed signals, it does provide for which should be correct with the conditions I have laid out. We will have to wait and see what tomorrow brings, but I have a feeling that regardless of what scenario pans out it will be an exceptional day for day trading!
If I had to make a call one way or the other I would side with the rally and then lower prices.
The first leg down formed in a way that says it cannot be the end of the decline, so we know at the very least that 1490 on the S&P 500 cash will not hold up. We are also very close to some strong resistance that should prove to reverse prices. Lastly, there continues to be an abundance of bullishness short and intermediate term. This needs to be weeded out and lower prices are the only way to do that.
With all that said I suppose I could have saved myself much typing by just saying
BE A SELLER OF STRENGTH!
While it took a while for the market to make up its mind which way it wanted to go today, once it made its commitment it really never looked back.
Day Trading today brought in 5 1/4 points, but 6 of those points were off the fade from the open and I did not have an Internet feed at the time thus I was unable to send the signals real time. The only real time trade today was a short for a 3/4 point loss.
The probability model for tomorrow goes both ways, but says that within the first 1/2 hour we will know which outcome is most probable.
The model calls for another stellar move higher, but if this is to hold true then the open tomorrow must be within 3 ticks of the low and the market should start very strong right out of the gate.
The other side of the model calls for sharply lower prices for the day, with a key reversal after the market rallies to the 62% retrace level, which would be about 8 S&P points from current levels.
So while the model is generating mixed signals, it does provide for which should be correct with the conditions I have laid out. We will have to wait and see what tomorrow brings, but I have a feeling that regardless of what scenario pans out it will be an exceptional day for day trading!
If I had to make a call one way or the other I would side with the rally and then lower prices.
The first leg down formed in a way that says it cannot be the end of the decline, so we know at the very least that 1490 on the S&P 500 cash will not hold up. We are also very close to some strong resistance that should prove to reverse prices. Lastly, there continues to be an abundance of bullishness short and intermediate term. This needs to be weeded out and lower prices are the only way to do that.
With all that said I suppose I could have saved myself much typing by just saying
BE A SELLER OF STRENGTH!
Intra-Day Update
While I think we will need some carry through tomorrow morning, it still is possible to reach the 1521-1522.5 target level on the cash S&P 500.
This number is a biggie for getting short and or buying puts, so keep a close eye on it.
This number is a biggie for getting short and or buying puts, so keep a close eye on it.
Intra-Day Update
The break down out of the diagonal triangle was anything but destructive.
While initially the market began to fall fairly fast, it quickly stabilized and then went virtually nowhere. Nothing worse than being on either side of the market when it goes dead like that.
Once everything was said and done, there was a 75 cent loss on the trade. It would have been break even had I not added to the position at the first move higher, but all in all 3/4 of a point for a loss is pretty darn good.
It is just one of those days that seems to not give you any action either for or against your position.
I do look for the market to break higher over the last 20 minutes or so and possibly sharply so.
I however will not participate as I think I will let the day rest.
While initially the market began to fall fairly fast, it quickly stabilized and then went virtually nowhere. Nothing worse than being on either side of the market when it goes dead like that.
Once everything was said and done, there was a 75 cent loss on the trade. It would have been break even had I not added to the position at the first move higher, but all in all 3/4 of a point for a loss is pretty darn good.
It is just one of those days that seems to not give you any action either for or against your position.
I do look for the market to break higher over the last 20 minutes or so and possibly sharply so.
I however will not participate as I think I will let the day rest.
Intra-Day Update, Diagonal Triangle
Remember that there is an extremely high probability on a diagonal triange moving higher like this.
It resolves itself by breaking lower.
It resolves itself by breaking lower.
Intra-Day Update - Add To Shorts
Feel free to add to your Shorts and or Put Options in here.
Keep the stop 1 point away from the time of your last position put on.
This should put your risk at about 1.75 to 2 S&P points.
Keep the stop 1 point away from the time of your last position put on.
This should put your risk at about 1.75 to 2 S&P points.
Intra-Day Update
We can begin to put our short line together right here.
Remember, keep the protective stop close.
Remember, keep the protective stop close.
Intra-Day Update
Internet troubles this morning prevented me from updating the blog intra-day, but all seems to be working now.
I am not going to post any of the trades taken today (1) simply because they will not be posted in real time and really have no value at this point. When I post a move, I like to have it posted in real time as after the fact such as now, anything could be said.
Anyway, not really a whole lot going on today as the market just seems to drift from one side to the other without anything concrete to get a hold of to justify action.
Remember, we do not trade just to trade. Doing just that will eventually be your demise.
So we wait until there is a strong set-up and then we go with it.
Currently I am leaning towards the short side as the probability model did call for a 70% chance that the low of yesterday would be either touched or broken and then snap back.
So there are a couple of potential set-ups in the works here.
1) A move lower, first to 1496 at which time we will see if it still wants to move lower.
If it does, then we can hold the Short and or Puts all the way to or under the low of yesterday.
2) A stabilization at yesterdays low could produce a rally back towards the high of the day, so keep an eye on this as well.
HERE IS THE HIGHEST ODDS TRADE FOR THE DAY FROM HERE -
A move to 1510.5 to 1511.5 should be shorted with both hands and a tight stop of a buck to a buck and a half should be adhered to.
I am not going to post any of the trades taken today (1) simply because they will not be posted in real time and really have no value at this point. When I post a move, I like to have it posted in real time as after the fact such as now, anything could be said.
Anyway, not really a whole lot going on today as the market just seems to drift from one side to the other without anything concrete to get a hold of to justify action.
Remember, we do not trade just to trade. Doing just that will eventually be your demise.
So we wait until there is a strong set-up and then we go with it.
Currently I am leaning towards the short side as the probability model did call for a 70% chance that the low of yesterday would be either touched or broken and then snap back.
So there are a couple of potential set-ups in the works here.
1) A move lower, first to 1496 at which time we will see if it still wants to move lower.
If it does, then we can hold the Short and or Puts all the way to or under the low of yesterday.
2) A stabilization at yesterdays low could produce a rally back towards the high of the day, so keep an eye on this as well.
HERE IS THE HIGHEST ODDS TRADE FOR THE DAY FROM HERE -
A move to 1510.5 to 1511.5 should be shorted with both hands and a tight stop of a buck to a buck and a half should be adhered to.
Monday, November 5, 2007
PIVOT POINT TUTORIAL
Here is a great twist on what has become a very overused trading strategy.
Floor traders use pivot points to dictate where to go long and where to go short.
If you are not familiar with Pivot Points just type the words into any search engine and
you will be given a plethora of places to read up on them.
The main problem I have had with these pivot points is that they are known by everybody and many traders use them. This makes them less effective for trading unless you can decipher where the bulk of traders are going use what pivots and pounce before the market gets there. This theory however uses quite a bit of guess work and I do not like guess work!
Enter the twist on the Pivot Points that I use in my trading.
I calculate the 50% and 62% level in between pivot points and use these as my areas to look for a short position or a long position.
See below the one minute chart of today and notice how I have market both the pivot points and also the 50% and 62% relationships to these points.
In my trading I put a lot less emphasis on the widely known pivot points and a lot of credence on the off shoot of this theory. It has done very well for me over the years and I encourage you to take a look and mess around with them for a while.
Combine these pivots with some very simple oscillators and you have a very simple yet effective trading system. Add some moving averages into the mix and you are bordering on signals that many traders would kill for.
I don't want to give all of it away. I would like you to experiment with some combinations of technical indicators and the pivots. I think you will be pleasantly surprised!
Floor traders use pivot points to dictate where to go long and where to go short.
If you are not familiar with Pivot Points just type the words into any search engine and
you will be given a plethora of places to read up on them.
The main problem I have had with these pivot points is that they are known by everybody and many traders use them. This makes them less effective for trading unless you can decipher where the bulk of traders are going use what pivots and pounce before the market gets there. This theory however uses quite a bit of guess work and I do not like guess work!
Enter the twist on the Pivot Points that I use in my trading.
I calculate the 50% and 62% level in between pivot points and use these as my areas to look for a short position or a long position.
See below the one minute chart of today and notice how I have market both the pivot points and also the 50% and 62% relationships to these points.
In my trading I put a lot less emphasis on the widely known pivot points and a lot of credence on the off shoot of this theory. It has done very well for me over the years and I encourage you to take a look and mess around with them for a while.
Combine these pivots with some very simple oscillators and you have a very simple yet effective trading system. Add some moving averages into the mix and you are bordering on signals that many traders would kill for.
I don't want to give all of it away. I would like you to experiment with some combinations of technical indicators and the pivots. I think you will be pleasantly surprised!
Aggressive Equity Trading Account Changes
Take a look at the Aggressive Equity Trading Account as there are quite a few
short positions covered today.
With the odds of a pretty tame opening tomorrow it should give ample opportunity to exit these positions.
They did quite well, which was needed after the string of 4 double digit losses in a row!
short positions covered today.
With the odds of a pretty tame opening tomorrow it should give ample opportunity to exit these positions.
They did quite well, which was needed after the string of 4 double digit losses in a row!
Daily Market Comment - 11/5/2007
The damage today had the potential to be much worse then the final outcome and this tells me a couple of things.
First, I don't think the smart money has unloaded all of their long positions so they might want to take it up a bit here to get rid of their remaining positions.
Second, Whenever you see this type of market action you know it is only a matter of time before the other shoe drops and that is exactly what is going on here now.
The probability model for tomorrow calls for a very mild up day to a complete blowout to the upside. This is the first bullish reading I have gotten from this model in quite a stretch now. The probability model seems to signal pretty much what I just talked about, that is taking the market higher one more time to suck in the unsuspecting before they take it lower in earnest.
I remain fully hedged none the less and continue to trade the intra-day swings in the market. Today was another good day with over 12 S&P points captured.
The probability model also calls for a tame opening tomorrow so we may be able to establish some day trading positions early, unlike today.
Make no mistake.... I AM NOT giving the green light to stocks right here. It just is starting to look like they can work higher over the short term.
First, I don't think the smart money has unloaded all of their long positions so they might want to take it up a bit here to get rid of their remaining positions.
Second, Whenever you see this type of market action you know it is only a matter of time before the other shoe drops and that is exactly what is going on here now.
The probability model for tomorrow calls for a very mild up day to a complete blowout to the upside. This is the first bullish reading I have gotten from this model in quite a stretch now. The probability model seems to signal pretty much what I just talked about, that is taking the market higher one more time to suck in the unsuspecting before they take it lower in earnest.
I remain fully hedged none the less and continue to trade the intra-day swings in the market. Today was another good day with over 12 S&P points captured.
The probability model also calls for a tame opening tomorrow so we may be able to establish some day trading positions early, unlike today.
Make no mistake.... I AM NOT giving the green light to stocks right here. It just is starting to look like they can work higher over the short term.
Final Intra-Day Update
Missed the short sale at 1509.25 to 1509.75, but not really a big deal as we are already up 12.5 points on the day.
I would expect the market to finish the day on a selling note.
We will take no more trades today even though we have until 4:10 pm est
I don't want to risk the 4 for 4 streak today : )
The daily market comment will be posted later this evening.
I would expect the market to finish the day on a selling note.
We will take no more trades today even though we have until 4:10 pm est
I don't want to risk the 4 for 4 streak today : )
The daily market comment will be posted later this evening.
Intra-Day Update - Stopped Out of Short
Stop was hit on the Short Position/Long Puts for another 5 points and currently we sit at 12 1/2 points on the day.
The power of trailing stops is huge and really helps to lock in profits.
The power of trailing stops is huge and really helps to lock in profits.
Intra-Day Update - Move stop to lock in 5 Points
Stop is now moved to 1495.50 for a lock on 5 points.
The market has continued to move sharply lower.
The market has continued to move sharply lower.
Intra-Day Update - Lock In Profits
With over 5 points of profit in the Sell, move your stop to protext at least half our profit.
I am moving my stop to 1498 which will guarantee another 10 point S&P capture day!!
If they continue to move the market lower move your stop along the way to lock in profit in 2 1/2 point steps.
I am moving my stop to 1498 which will guarantee another 10 point S&P capture day!!
If they continue to move the market lower move your stop along the way to lock in profit in 2 1/2 point steps.
Intra-Day Update - Move Stop To Break Even
Move stop to break even at 1500.50 as once again the breakdown has not accelerated.
Should it choose to move lower from here we can ride it lower and move our stop down and if it decides to move higher then we take comfort in the fact that there is only commission as our loss.
Should it choose to move lower from here we can ride it lower and move our stop down and if it decides to move higher then we take comfort in the fact that there is only commission as our loss.
Intra-Day Update.... Short The Break
Look to Short/Buy Puts on a break of 1500.50 basis the S&P 500 cash.
Keep a close 1.5 point stop if executed.
Intra Day Update - Lock In Profits
I consider this a stall and I am moving my stop from break even to 1503 to lock in another 2.5 points.
It should have broken hard once 1501.50 was taken out, but it floundered just below.
It should have broken hard once 1501.50 was taken out, but it floundered just below.
Intra-Day Update
Move stop on Short Positions/Long Puts to break even basis the cash S&P 500 at 1505.50.
S&P is trying to break 1501.50 for the third time and if it does, we should see prices accelerate to the downside.
If it fails to break 1501.50 or breaks and does not accelerate to the downside then we might see a run for the highs of the day.
S&P is trying to break 1501.50 for the third time and if it does, we should see prices accelerate to the downside.
If it fails to break 1501.50 or breaks and does not accelerate to the downside then we might see a run for the highs of the day.
Intra-Day Update - Market Looks Very Weak In Here
The market is really acting like this is the calm before the storm and it wants to make an extended move lower.
There is no question that this entire move off the lows today is NOT impulse, but counter to the trend which is down.
I am going to put half of my short into action here and if we rally back to the highs and look to stall I will put the other half on up there.
Intra-Day Update.... Stopped Out Of Short
Could not break below 20 and a quick buying spree stopped us out.
Not before we skimmed another 2 1/2 points.
So far today, we are 5 points to the plus side.
Not before we skimmed another 2 1/2 points.
So far today, we are 5 points to the plus side.
I am still looking to short 1509.25 to 1509.75 basis the S&P 500 cash.
Intra-Day Update
A break below the 20 line on the indicator in the blue circle should really help our short position out.
This is a high probability pattern of sharply lower prices to come.
This is a high probability pattern of sharply lower prices to come.
Intra-Day Update
A break below the trendline should send prices reeling lower.
Move the stop to break even on the Sell Short/Buy Puts trade which is 1506.48 on the S&P 500 cash.
Market is about 3 1/2 points below our entry.
A move to 5 points profit will move out stop to lock in 2.5 points and so on and so forth.
Market is about 3 1/2 points below our entry.
A move to 5 points profit will move out stop to lock in 2.5 points and so on and so forth.
Intra-Day Market Comment
I am starting to believe that the market could come all the way back to its open this morning, which would be a very sizable move.
The arms index is showing some real underlying strength sitting solidly in the buying area with the market sharply lower.
Although I have yet to commit myself to this possibility, it has some real merit.
If they run this market down to the lows again and we hold or stabilize just under the lows I will look to go long.
With all that being said, I still look to go short at 1499.25 for the move back to the lows.
I sum all of this up for the simple reason that if it plays out as I think I will not have time to update the blog.
Keep an eye out for this scenario, it offers some great intra-day profit potential.
The arms index is showing some real underlying strength sitting solidly in the buying area with the market sharply lower.
Although I have yet to commit myself to this possibility, it has some real merit.
If they run this market down to the lows again and we hold or stabilize just under the lows I will look to go long.
With all that being said, I still look to go short at 1499.25 for the move back to the lows.
I sum all of this up for the simple reason that if it plays out as I think I will not have time to update the blog.
Keep an eye out for this scenario, it offers some great intra-day profit potential.
Intra-day
A break of 1499.25 on the Cash S&P 500 will put us short again.
We will keep a very close stop of a buck if the price area is hit and the order s get executed.
We will keep a very close stop of a buck if the price area is hit and the order s get executed.
Intra-Day Market Comment
Good Morning,
Not much time this morning, but we are short from 1504.75 on the S&P 500 cash on the strong rally off the lows after a killer opening. Stop is at break even.
This rally off the lows should and is not holding. Use the 10 minute simple moving average to move your stop.
Not much time this morning, but we are short from 1504.75 on the S&P 500 cash on the strong rally off the lows after a killer opening. Stop is at break even.
This rally off the lows should and is not holding. Use the 10 minute simple moving average to move your stop.
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