Day Trading the E-mini Futures

[joshdance 10]

out 36.50 for a tick.. thought about closing and should have after second attempt to break 38.25 failed.. but oh well, better than a loss!

 

For the benefit of anyone reading,

 

Here is a chart to accompany my reason for considering closing the trade at 37.75 or 38. These profile bars are 1m in length. Note the volume that took place at 38 (red arrow). Buyers actively buying, offers held very well. But that doesn't mean much, what means more is what happened next... it failed to follow through, found support at 37.50, and then did not break above 38 again. It's really a tossup if I have to be honest, as a buyer could have slammed a couple of thousand contracts and we'd be higher. However, my gut told me to close the trade a minute or two after 38.25 failed to break, and this was my objective piece of evidence to go with it. I think generally it's a good play to stick with the long side on a day like today with huge movements up, and that's why I stuck with it a little longer; I'll put it like this: I'd generally rather be long on a day like today than short.

[joshdance 10]

If 34 breaks, which it looks like it will, my buy zone would be 32 to 33.50

[joshdance 10]

I'm not comfortable shorting this, so I took a sim short 34.75, target 32.50

[joshdance 10]

filled +2 on that sim short ... hard for me to take some of those trades that I feel 90% confident in, for some reason.

[TheNegotiator 13]

I have to say I didn't trade again yesterday afternoon as was busy unfortunately. Looks like the break was good though. Josh a question.

 

Before lunch you'd said:-

 

The volume sure makes it look that way, however, we are now below a heavy POC ledge at 37, and there's a nice little cluster of prior demand down at 32-33.50, may seek out serious buyers there. It's been thrown down twice now, though it is finding support in 35s

 

Then after you said:-

 

If 34 breaks, which it looks like it will, my buy zone would be 32 to 33.50

 

But then:-

 

I'm not comfortable shorting this, so I took a sim short 34.75, target 32.50

 

You took the sim trade and it worked, but why the change in mindset? Your buy zone was 32-33ish and we already thought it could get to 41.50 or even 48.50 if it did go. Yet you changed your mind and looked to trade 34.75 to 32.50. Was there something I missed or did it just wear you down?

[TheNegotiator 13]

Well we're still higher overnight so far after testing 1248.50 and getting to 49.50. Yesterday had rallied hard pre-NYSE open and so after an initial follow through, it consolidated for a while. The late break and reaction to it gave a few clues as to what to expect today in my opinion.

 

Seems to me to be quite a bit of overhead volume to contend with especially considering NFP is tomorrow. Remember ADP came in strong at 206k vs. 130k expected and that had a few analysts revising their calls for NFP. ISM is also an important release at 10am EST.

 

We'll have to see as we always do, but my guess right now is that people will want to wait for Friday before really commiting either way.

 

[joshdance 10]

You took the sim trade and it worked, but why the change in mindset? Your buy zone was 32-33ish and we already thought it could get to 41.50 or even 48.50 if it did go. Yet you changed your mind and looked to trade 34.75 to 32.50. Was there something I missed or did it just wear you down?

 

One of my (many) weaknesses is shorting right now. I have a difficult time shorting. Buying is just easier for me. So sometimes when I see what I think is a good opportunity I'll sim trade it, and have been doing this for several shorts but not posting them. I thought, the buying doesn't look real, and 33 or lower is almost a given, so why not catch a little of it? I looked and realized that we've been short for several hours, and perhaps catching a small leg of it would be good. I did not take the trade with real money because it's not a comfortable trade for me yet, but I wouldn't mind catching those 1 to 2 point scalps, but I need to get comfortable doing it first.

 

32.50 held beautifully, almost too beautifully to be convinced it would not break. The volume looked picture perfect for me for a long. After buyers proved themselves after the initial move up from 32.50, on the retest, I saw nothing special. I saw a lack of interest, and I was looking for more buying interest AT 32.50 to 33... I didn't see it, and it kind of meandered it's way up, then started to look for real too late for me to be comfortable jumping in.

 

I'm still developing the ability to stay focused. I'm getting better but I failed to capitalize on the opportunity to buy 33 when I had the chance ... actually now that I remember, I actually did bid 33 after it came up the second time from 32.50, but was not filled. Had I been convinced in the trade though, I would have paid up to 33.50. So I could have gotten lucky and got filled, but essentially I was not fully convinced enough to pay up a little more.

[joshdance 10]

Well we're still higher overnight so far after testing 1248.50 and getting to 49.50. Yesterday had rallied hard pre-NYSE open and so after an initial follow through, it consolidated for a while. The late break and reaction to it gave a few clues as to what to expect today in my opinion.

 

Seems to me to be quite a bit of overhead volume to contend with especially considering NFP is tomorrow. Remember ADP came in strong at 206k vs. 130k expected and that had a few analysts revising their calls for NFP. ISM is also an important release at 10am EST.

 

We'll have to see as we always do, but my guess right now is that people will want to wait for Friday before really commiting either way.

 

 

After that little stop run close to midnight last night, it tested 36 on the low side, and back up to 48 on the news spike. What you see as good buying I also see as lots of sellers demonstrating their willingness to get out of this market. Almost half a million contracts traded in the last half hour, and look how far price went relatively speaking... not very far. Classic Wyckoff: huge huge effort, very small result. After that, just a blip above, and now we're holding below yday's high. So far the area below where that buying really started (36ish) has been tested and it has held. So, I would not want to see it go really much below that with seller strength; if it does, it will be an indication that the sellers who absorbed all that buying yesterday have the upper hand, and we could see a big batch of selling as it tests in the low 1200s. Just my opinion.

[TheNegotiator 13]

My point would be though, which side did you see more potential for? If you only were looking at a couple of points by selling compared to maybe between 8-16 points if it moved up, why not wait for the long? It could be a decent quicl scalp type trade to sell but no more than that based on what you said. But hey.

 

The long/short bias is probably not such a good thing though. You need to work on that. Sure you will

[TheNegotiator 13]

After that little stop run close to midnight last night, it tested 36 on the low side, and back up to 48 on the news spike. What you see as good buying I also see as lots of sellers demonstrating their willingness to get out of this market. Almost half a million contracts traded in the last half hour, and look how far price went relatively speaking... not very far. Classic Wyckoff: huge huge effort, very small result. After that, just a blip above, and now we're holding below yday's high. So far the area below where that buying really started (36ish) has been tested and it has held. So, I would not want to see it go really much below that with seller strength; if it does, it will be an indication that the sellers who absorbed all that buying yesterday have the upper hand, and we could see a big batch of selling as it tests in the low 1200s. Just my opinion.

 

That was definitely in my thinking too Josh. The question is are the sellers closing positions or opening new ones?

[joshdance 10]

Seems like market waiting for ISM.

[TheNegotiator 13]

Seems like market waiting for ISM.

 

Yeah absolutely. ISM is a pretty big figure which can move the market.

[joshdance 10]

That was definitely in my thinking too Josh. The question is are the sellers closing positions or opening new ones?

 

Good question -- Tuesday's open interest was 2,950,000 so we may have some idea after today's settlement on that... though that won't give us tons of info

[joshdance 10]

This market still seems relatively strong at the moment, going on just price. Even with a 402K unemployment and forecast 390K, it only traded down 4 points. Pretty strong move up right through yesterday's close and high. Will be interesting to see ISM and how market reacts to it.

[joshdance 10]

got a 40.25 bid .....

[joshdance 10]

got a 40.25 bid .....

 

filled and out at 39 for -1.25 ... looked good to start with

 

bid 40.25 filled, see where this goes

[TheNegotiator 13]

filled and out at 39 for -1.25 ... looked good to start with

 

bid 40.25 filled, see where this goes

 

I don't know. It just feels heavy. Looks like there might be buyers then it gets slapped down again. needs to convice me otherwise I'll look at 37.5 &34.5/5

 

Although at least right now delta has flattened out a little.

[joshdance 10]

filled and out at 39 for -1.25 ... looked good to start with

 

bid 40.25 filled, see where this goes

 

out BE ..............

[joshdance 10]

bought 41.50, stop 40 ......

[TheNegotiator 13]

That last push up was promising but I would've really wanted it to move through the open easily at least on the 2nd push. Also I want to see it hold above 41.50 which is also the IB low.

[TheNegotiator 13]

bought 41.50, stop 40 ......

 

Targeting the 44-45 area or are you looking for a little more?

Edited December 1, 2011 by TheNegotiator

[joshdance 10]

Targetting the 44-45 area or are you looking for a little more?

 

would love to see 48 but i may settle for 45 given the selling strength we have had

 

stop is 42.25 ... lots of sellers here, want to walk away with something

 

edit: out 43.50 for +2 .. may buy breakout

Edited December 1, 2011 by joshdance

[TheNegotiator 13]

1246.25 area might also be interesting if it can find its feet.

[joshdance 10]

1246.25 area might also be interesting if it can find its feet.

 

Yes -- immediate direction looks a bit down to me at the moment though.. 43.75 failed twice doesn't look promising, though sentiment looks long to me at this time.

[TheNegotiator 13]

Well yesterday ended up quite balanced and imo this wasn't too surprising. ES tested both ways but closed in the middle(ish) and formed a doji. This was pre-NFP. So NFP came out high although perhaps not quite as high as some had hoped yet so far we haven't really sold off significantly. Personally I would think that if we held above yesterday close and even better above yesterday's high, we may well be able to push to ON high 62.75 and then possibly 70 then 75 areas. Below 41.25 and to me there's a decent chance of testing 1230 area at some point.

 

We will have to see though