ES Trading for 10/1 thru 10/5 2007

[TinGull 10]

HA! nice work, man. Really nice. Hopefully some day I'll be able to interpret things as you do. Love hearing your commentary.

[Dogpile 10]

re today, my first thought when I see a good overnight 'impulse' down is to look for a short if it does a 'abc-up' pattern. ideally into a Fib resistance zone.

 

http://bp2.blogger.com/_5h-SWVGx6Ms/RwOUZiyj7XI/AAAAAAAAAc8/sfcrfoPxl9k/s1600-h/Oct+3++ABC+Up+Possible+Into+Fib+Resistance.png

[Dogpile 10]

my post-mortem using a concept I presented in last weeks thread.

 

The 15-min LBR 3/10/16 'slow line' is a nice way to think about the TREND of the momentum. In general, I try to keep my long/short bias not with the trend of price -- but with the trend of the momentum. Momentum is generally a leading indicator to price -- but the slow line is a lagging indicator to momentum -- so you have to think about it dynamically rather than waiting for it to actually cross zero.

 

Yesterday had 'ABC up' pattern into heavy resistance at 1558.00. A failure there could set in motion a downward auction -- as the trend in the 15-min momentum was poised to flip downward. This is what happened overnight.

 

My twist on the LBR oscillator is to use the 5-period 15-min stochastic. You can see it is low right now so its difficult to short down here. You can see it was HIGH yesterday afternoon --- this was the spot to short -- so here you had to ANTICIPATE the downward auction to begin with the failure at 1558.00. The late 'ABC up' pattern was a bull trap and the failure there sows the seeds for a hard flush down.

 

Helps me to understand structure if I try to explain it in writing so that is the reason for this post. I find that thinking hard about the 15-min 'slow-line' keeps you in-step with the intermediate term direction of the market. Then you find set-ups that are consistent with that bias. that is one key way I like to think about it anyway, would love to here comments on this.

[TinGull 10]

Very interesting stuff. I've never watched anything else for a trend. Today's got me all wacked out on the shorter time frames. 15min ES looks like a bull flag, though.

 

[TinGull 10]

But now ES is running into that 58.00 level already on a 10 point range. Volume's "OK" but I don't think it'd have the steam needed to break through that heavy level right now. Plus 200% IB lies up at 59.00 and that's a potential area for the ES to show some resistance.

[darthtrader 10]

sweet overnight trade dogpile.

I didn't even bother watching things much today, started painting my house..

Totally no clue on this type of day yet. Although now in retrospect it looks like we just started auctioning into a lower bracket than yesterday.

 

Maybe with that volume distribution the last 2 days a long if we get down to the 1546/7 area might be nice if it can't break it.

[Dogpile 10]

hi Darth,

 

I gave most of it back on this one:

 

http://www.traderslaboratory.com/forums/f34/sickest-stop-outs-2583.html

 

It was a bearish day and we have now auctioned down --- will wait to see next set-up --- which probably won't be today for me.

[Dogpile 10]

ok, built lower value 2 straight days and formed a fat volume distribution ('b' profile) low in the range (1549-51) with a big PVP built at 1550.75... My initial bias will be long for tomorrow.

 

trying something new by simplifying the high-volume areas. this just takes the PVP for the day as a proxy for the high volume zone. you can see how we have built lower value 2 straight days. Taylor concept would be to look for a test of the previous day low to go long (could be a higher low or a lower low than previous day) -- just looking for some kind of morning test down to then go long. If it tests up first, then we will look for resistance in that 57.50-58.00 zone and not enter any longs if disadvantageous position relative to those levels.

 

So those are the 2 key zones:

1546.50 on the downside (todays low)

1557.50 on the upside (Tuesdays PVP)

 

The next level down would be 41.75 from 9/27 should we get a bearish day.

[TinGull 10]

I agree for the most part. I'll be looking long if we're able to break that flag pattern that has set up. That would give me cause to believe price could break 58.00. We could, of course, just gap up to there tomorrow, but I feel more like there's a slow bleeding weakness in the markets and if there is an up-day tomorrow, it's not going to be lasting too long.

 

There's also a good chance of just rotational trading until Friday's jobs number (I hate economic data for that reason....it can slow things unnecessarily) and there is a great range set in place for that to happen between 45 and 58. I wouldn't expect either of those 2 areas to be broken tomorrow, but would expect something to happen on Friday.

 

Either break I could see as valid, as price is holding up at the highs pretty nicely, though still is showing a potential to roll over. If price is to come back into the range set in place between 9/19 and 9/28, then I'd be watching for price to fall back to the lower end of that range around 35.00.

 

 

 

[Dogpile 10]

well, we have traded up overnight and will open at a level that will begin to build higher value than previous day. That said, we are overbought and so I will still wait for a good swing down to go long -- which might take a while.

[TinGull 10]

Price hasn't begun to build a higher value as of yet, though. If it continues to auction up, it will.

[TinGull 10]

[Dogpile 10]

lol Tin, yah agree, open was in no man's land.

 

can see how the market twice traded down near 47.00 area yesterday --- it did not form a tail or reject this 47.00 level -- thus can be reasonable expectation that it might exlpore down there again --- ie, below the 49.00-51.00 high volume zone. will see if we get buyers down there after exploring that area? that is my expectation for now.

[TinGull 10]

My expectation as well.

[TinGull 10]

And yay...building another HVN right in that 48-50 area from yesterday. No trades getting placed till this area is history.

[TinGull 10]

One thought on the picture I posted opening up in "no mans land"...

 

Price has these low volume nodes because no one wants to do business at those prices. If business wasn't done there before, good chance it won't be done there in the near future either. Price could have just as easily started to auction up into the smaller HVN and highs from yesterday and start to break this flag pattern on the 30min....but didn't. Is price trying to seek out a little bit more buying action at the lows to push higher? Or is price just really not wanting to be up there before the report tomorrow....

[darthtrader 10]

Dogpile, I looked at that thread with getting stopped out yesterday very quickly...I didn't realize that had just happend to you. That was BRUTAL.

 

I was just looking to take a long at 48 but it bounced off much to fast. 4th time we bounced off that but $tick was pretty neutral that time. I'm only looking to fade $tick extremes going the other way at 48 and 55, or go with direction if we break 48 short.

[Dogpile 10]

appear to be balancing now. we formed a higher low and traded up thus the taylor bias played out --- I didn't trade it.

 

49.00 to 51.00 has been a high volume zone and we have now traded back down towards that level with VWAP ~1551.75 --- slightly above yesterdays closing VWAP and above yeterdays 1550.75 PVP. Thus we are building value about equal to yesterday so far -- slight upward bias but could go either way.

 

Hopefully, we get a clean break and this mornings test-up can serve as a 'high made first' selling tail and we can get some downside continuation. this would be consistent with what looks like an 'uncompleted bottom' yesterday where the market did not put in a good buying tail type of rejection. we did make a higher low today which would be viewed as bullish but that trade ran out of gas and have since pushed back below VWAP.

 

attached is the noon-time volume distribution. not much to say other than the morning test up could be seen as a selling tail by the end of the day.

 

either way, we need some renewed momentum away from 50.75

[darthtrader 10]

ahh man, that volume distribution sucks. Had my price levels set right at no volume. .5 too high on both sides. Fading the high $tick at 10:50 at 1554.5 would have worked perfectly but I was waiting for 1550. Looking for the same setup again at 1554.5 but won't play a breakout if it occurs above that. Hopefully things pick up after lunch.

[Dogpile 10]

no secret that we are in a coil. can see it well in the 15-min chart. this is a John Carter 'Mastering The Trade' Set-up (chapter 10) applied to a 15-min chart. The indicator puts up a red bar at the bottom when the 2.0 std dev bollinger bands compress inside the 1.5 Keltner Channel (both are set to trailing 20-bars in timeframe) . This kind of compressed range sets the market up for a hard directional push.

[TinGull 10]

And I get to be driving to Vermont tomorrow while there's FINALLY going to be some action... Life's wonderful like that sometimes eh? hahaha

 

Best to you trading tomorrow, oughtta be fun.

[darthtrader 10]

well the after/overnight market killed that one. seems like there has been some very nice trends there lately.

 

interesting to see if this sets up a trend day, trend day high seems kind of extreme if this hold though.

[OAC 10]

no secret that we are in a coil. can see it well in the 15-min chart. this is a John Carter 'Mastering The Trade' Set-up (chapter 10) applied to a 15-min chart. The indicator puts up a red bar at the bottom when the 2.0 std dev bollinger bands compress inside the 1.5 Keltner Channel (both are set to trailing 20-bars in timeframe) . This kind of compressed range sets the market up for a hard directional push.

 

I think in real practice, John Carter and his partner, Hubert Senters use a different setting for the BB. (1.5 SD and 15-bars) I am not sure what the real difference is ?

[Dogpile 10]

I guess I should have said 'inspired by Mastering The Trade' --- this one works for me -- no clue what they actually use.

[Dogpile 10]

note this pattern set-up for 2nd time this week --- Monday and Friday. My very favorite pattern of all: the 15-min First Cross Buy (best after a downswing or good coil).