That was pure luck. Stop is one of the hardest aspect in trading. The AH price movement sometimes is very annoying, but it does provide some opportunity to enter a trade at a better price level which is not available during RH. In retrospect, I should have set the stop at 1898.5-1898.75 which was the intraday high during Tuesday's RH.
7-28-2010 Covered 1 NQ short at 1871. I am looking for re-enter pt for new short. I expect ES to correct to 1095/1085. Of course, it might just quickly drop to these levels without meaningful bounce.
Thanks for your reply. Nothing pure luck in trading I have the 1895 on my chart too, but i don't think i will set the stop around this area. Meanwhile, I have watched your journal for some time, it seems that this is the first time you hold overnight position. I was with you when Monday the market showed strange momentum for an uptrend. However, I think the market will lose its strength around these area until it finally picks one direction. What makes you so confident to hold a short overnight position?
7-29-2010 Last night, I placed a limit order to sell one contract of NQ at 1880 (50% retrace from Wed's daily range). If NQ trades above Wed's RH high on Thursday during RH, it would prove me wrong and I would cover my short. The order was filled this morning before market open. NQ touched 1885 and then went down to 1871. Based on the price movement, I don't think this morning's gapup would be a reverse move. I believe yesterday's low would be retested at least. I set limit buy order at 1860. It was filled while I was in morning meeting. My estimation about down target was a little conservative. My original guess was ES would at least make another 5 pt down thrust below yesterday's RH low, which could translate to at least 10 pts down thrust for NQ below yesterday's low.
8-2-2010 long one ES August 1120 put at 19.75 (ES traded near 1119). If ES close above 1122, I will close the position. I plan to hold it for max 3-4 days. I expect ES to retest 1106-1107 soon if my assessment was correct.
8-3-2010 I am still holding the august ES 1120 put. 1124 is very likely a short term top before another at least 40-50 pts down movement completes. I shorted NQ at 1895 near 11:22 ET and covered at 1888 before market close. I shorted NQ again at 1894 at AH (stop 1902). I expect 1860-65 would be retested this week. The large picture of ES is it looks like it is forming a rising wedge which is bearish and most likely will resolve to the downside. While many are waiting for ES to go to 1130-1150, it might not do that as expected by many both bulls and bears.
8-4-2010 The upthrust move based on news is bearish to me. This might be some final short squeeze before it goes down. If today's price range (ES) can be maintained between 10 pts and close at or below 1120, there most likely will be some imminent large down move. I stay short. This fake upthrust probably has produced all the negative divergence that many sellers are waiting for. By the way, my short position of NQ at 1894 yesterday AH became profitable until 2 hrs before market open this morning. I could have set trailing stop to avoid any loss when at one time, I had 10 pts profit. This price action convinced me to hold NQ short for at least 40-50 pts down movement.
8-6-2010 I closed my august ES put when ES traded near 1105. 1106 was a key level I was watching. The reason I close it was, 1. to avoid time decay over weekend, 2. I can always reshort when it bounces. I still hold NQ short and waiting foro at least ES 1075-85 level to be retested. This down move could potentially lead to retest of this year's low. The more it doesn't want to give up the up move, the ugly it will get since last several days it looked all like distribution to me. At 3:45pm, the up move looked like retest the neckline of complex top. If this is the case, more downside next week. I bought august 1120 put when ES traded at 1117.5.
8-10-2010 I added one August ES 1120 put yesterday near close when ES was traded at 1126. I close it this morning when ES was near 1110. I am holding another 1120 put purchased last Friday near market close when ES was traded at 1117. I also have a short position of NQ entered at 1894. My plan is still to wait for ES to retrace at least to 1175-1185 before I cover my short NQ. The option was a little tricky due to time decay. ES's daily range has been relatively tight for the the last 6 trading days. Tape reading says it was distribution. Many people were looking at the rising wedge from TA viewpoint. If ES had retraced quickly after 1-2 day distribution, it would very likely to make another higher high within near future. However since it has done such a long distribution period (6 day already), this time the fall could be quite ugly and retest 1000 is also quite possible. With the spike of VIX and FOMC day, we could see some bounce later today or tomorrow. After that, we might not see 1120 for quite some time.