Extreme Weakness

Thursday June 7th, 2007 ES Futures

How Did it Go

Better, but still not where I want it to be for a day like today. I caught a couple of the down swings and actually make some profit on a couple long trades too. But I still can do better. As weak as the NYSE Tick was today, I should have shorted anything that even looked like a top.

Why was my game still off today. The price action felt jittery or jumpy to me most all of the day today. I seemed to get transfixed with the jumpy price action and did not focusing on all my tells like I should. It started when I just missed the rocket ride to the long side early in the morning. I took me over an hour to adjust and get a good feel for today. Then I still felt a step behind on many moves.

More Volume Tells

This is a little hard to see in the 5-minute chart but try to follow along. We start by looking at the double top between the 8:50 CT and the 9:05 CT candles. The 5-minute chart then hides the pull back as it is split between the 8:50 CT and 8:55 CT candles. Leaving both 5-minute candles looking Green or up moves.

But notice the volume after the first top. Big drop in volume and reduced again in the 9:00 CT push to the second top. What you did not sell the top, there was 5 minutes to sell 1532.00 or better. Well I saw it, and decided not to trust that signal as we already shot up 4 points on almost unbelievably weak NYSE Tick readings. I added to the 5 minute chart for reference.

Normally I'd expect to see NYSE Tick readings touching the green horizontal line in the chart for price to move significantly higher. See how the first near touch at 13:30 CT started the afternoon long trend.

Next, the 9:15 candle's volume screams short the next turn down. I should have taken it, but the NYSE Tick was so weak that I was waiting for a slight push higher before I shorted. My Volume Delta indicator tried to tell me that was all I was going to get for the move up. I was still trying to get in sync with this very "different" day.

Trade Wise, Trade Well
John

Tight Price Action

Thursday May 31st, 2007 ES Futures

How did it go today

The 5-minute chart does not do the price action justice. Most of my entry signals for today came while price was in tight sideways chop. Notice in the light blue lines in the 5 minute chart below. These lines defines my calculated "immediate trend" that tells me the direction to focus on trades. If the lines "stair step" lower, I look for short entry signals and if the lines "stair step" higher, I'm looking for long trades. As you can see, there are not many steps in the same direction today.

Too often it seemed price was buzzing sideways in about a 1-point range for 10 to even 30 minutes. This left me scratching my head saying the signal really worked. It was just me who did not trust that price would not actual "move" against my entry and cause me to use a bigger stop that I wanted for the trade.

Trade Wise Trade Well

John

How Long Can We Trust That

WOW...

That makes three days in a row where we have sold off hard in the afternoon and closed near the low of the day. Did you expect it again today? I did not think it would repeat this many days.

BUT...

I can not prejudge and decide what the market will do. I need to follow my trade signals to stay on the proper side of the trend and jsut see what profits follow. The first long signals early in the morning worked great. Then the anticipated pull back from the initial highs. From here, I wanted the market to blast to the moon.

I talked myself into a scenario where the market just could not sell off a third day in a row. This just has to be a fakeout. Make price action look like we are setting up for a selloff, then blast higher.

Well I did not get killed, but I scratched out of too many long trades at break even, longing for more profits, instead of harvesting the available profits. Worst of all, I was "looking the wrong way" and did not take trades with the trend. I saw my short signals, but did not "want" to listen. So when my long trades got stopped out, I'm not short and end up watching the move go without me.

Today should have been an awesome day with profits that some people would think of as unbelieveable to obtain for one day of trading. Instead, I'm left disapointed at my trading. From now on, I must take the trades and let the market "show me" what it is going to do. I'm killing my profits "wanting" or "Hoping" the market does what I decided.

Trade Wise, Trade Well
John