I received a PM regarding holding a position into tomorrow. I'm a short term trader. With the exception of this hourly cycle I'm following as a side experiment, I try to close out at the EOD. The FOMC meeting is in the afternoon. I personally will trade only the first few hours of the morning and I will definitely be out by 1200 CST. Look at past FOMC meetings. The spikes are very very difficult to trade.
Update on 401K trade. US Real Estate Short is up 15.78%. Dow short is up 2.02%. Per earlier post my regret is I have 75% in the Dow short fund and 25% in the real estate short fund. I haven't had a losing day with the real estate short fund. The Dow short fund has been up and down.
Not bad, huh? The 1300 trade worked although it was one hour early. Here's the deal. These one hour cycles may move slightly at the completion of a cycle. The one I gave for Monday which closed on Tuesday actually moved forward one hour if I wanted to go back and redo the most recent count based on the actual low. Bottom line, the new count would have placed the buy at 1400, which in fact was the best time to buy. Summary: I'm looking at single best times to buy based on a 5 min chart and rather extensive neural network calculations as one method. I'm looking at an hourly bar chart and making sure I've scaled it properly (very few software applications allow you to do this, at least to my knowledge) I slice the day and visually begin counting with a bar counter as method two. A third method I'm looking into is incorporating a pattern analysis based on analyzing the behaviour of the market over a slice of days or weeks and then calculating turning points forward into the future. This third method doesn't involve cycle analysis. For today, I see this as my scenario. I think something is up with the stock market. And I don't mean prices. I think something is seriously wrong. I can't over emphasize this. I think the sub-prime issue and hedge funds and banks caught up in the mess is only the tip of the iceberg. Like LCTM, and the whole long list of acronyms from the recent past, we will only read about what is really going on after the bad guys have made their deals and gotten their billions out. I think we are due for a correction. My take is bonds are up and stocks are down for the short term. Although I do believe by December 2007, we will close beyond these most recent highs in the Dow at least once. Anything is possible, that is why I trade short term. I'm looking to buy dips in the bonds today and short the Dow at key times. Finally, depending on Fedspeak, we could be setting ourselves up for one final rally into new highs before the 10% or greater correction. Good trading!
0734 CST Just waiting to buy a pull back. Today is a day to only trade the morning and be done by 1100 or 1200 CST.
0739 CST Bought 1 ZB at 107 12 to test the waters. I'll probably buy up to 4 on this first trade looking for a better entry.
0742 CST This is standard retracement buy stuff. Obviously any move below 107 00 is your absolute indication that the strategy is wrong. Technically the stop is higher than 107 00 but that is up to the individual.
0751 CST Long a total of 2 ZB 107 12. Looking for a re-test of highs to get out. May hold for longer, but as today is FOMC, I don't want to push things too much. I see this trade as good through at least 0820 CST.