ES Trade Example Today

Discussion in 'Index Futures' started by Flashboy, Apr 27, 2004.

  1. Looking for other ideas on the setup that occured today at 10:10 (est) on the ES after the consumer confidence report..

    Did anyone short here?

    If so, can you explain your reasoning.. if you did or did not?

    We had just exceeded the prior day's high by a point or so.. and went above R1 by I believe .50 point..

    I didn't take the short.. I'm usually skeptical on taking a short after a fast run up like that..

    Chart is attached..
  2. You are right on the the top of R. Testing the top of R.

    You have a flat top pennant on IT trend whose top is the same as the LT (long term) left trend line.

    When you are in a situation where LT, IT and intraday as congruent on the same upper limiting value, you have zero risk for trading BO's down off the top of R.

    All days do about 4 trends. Half of them are usually down.

    Nowadays you get about 8 to 10 points per trend on the ES.

    Trading is not rocket science.
  3. Here's the thing. You need th learn to trend not to predict. People act different to different news. Its not always the short or long or keep or fail.. Its to what constraint..

    Index rose after a stronger-than-expected reading on consumer confidence encouraged investors that growth in earnings and the economy will help extend the market's 14-month rally.

    ``If consumer confidence is up, then, de facto, investor confidence has got to be up as well,'' said Dave Briggs, head of global equity trading at Federated Investors Inc., which oversees $185 billion, in Pittsburgh.

    Pulte Homes Inc. gained after the homebuilder reported profit that beat the average analyst estimate. Energy shares advanced, paced by Exxon Mobil Corp., after OPEC's president said the cartel might raise its oil-price target by 30 percent.

    The S&P 500 rose 2.62, or 0.2 percent, to 1138.15, its fourth advance in five days. It has jumped 42 percent since its 2003 low in March of that year. The Dow Jones Industrial Average added 33.43, or 0.3 percent, to 10,478.16. The Nasdaq Composite Index lost 4.24, or 0.2 percent, to 2032.53.

    Benchmark indexes pared gains after reports of explosions in Syria and gunfire in Iraq. The United Nations building was on fire and a terrorist group started shooting following three explosions in a western Damascus neighborhood, Al-Arabiya news reported, citing the Syrian state news agency SANA. Heavy gunfire from a U.S. aerial gunship was heard in Fallujah, Iraq, Cable News Network reported.

    `Rolled Over'

    ``It is totally related to Fallujah and Damascus,'' said David Memmott, head of listed trading at Morgan Stanley in New York. ``The market rolled over right when headlines crossed.''

    Six stocks rose for every five that fell on the New York Stock Exchange. Some 1.5 billion shares changed hands on the Big Board, in line with the three-month daily average.

    Individual investors' appetite for stock mutual funds may be lifting share prices even as better-than-expected economic reports build the case for an interest rate increase.

    In the first quarter, investors plowed record amounts of money into equity funds on optimism about the strength of the global economy, Strategic Insight reported last week. An estimated $135 billion flowed into stock and balanced funds, which hold a mix of equities and bonds, in the period, the New York-based firm said. That exceeds the previous high of $134 billion in the first three months of 2000.

    ``You may not like the market, but if cash comes in, suddenly a number that's better than expected is enough to get investors to react,'' Briggs said.
  4. Conventional top today see forecast since Saturday:
    <IMG SRC=>

  5. Grob,

    Thanks for the post.. I see what you mean referring to the Long Term Trend Line now..

    But I'm not sure I follow when you say flat top pennant on the IT trend..

    Is it possible for you to post a chart?? What time frame are you looking at when referring to IT??

    thanks again
  6. Hi FlashBoy,

    In your chart example when you asked...

    Would anyone short here?

    I saw a few do just that @ 1020am est. Your question on the chart itself is also pointing at the price action @ 1020am est whereas your question in the message post was reference to 1010am est.

    At 1010am est...that was the close of a wide range body white candlestick.

    I saw a trader try to short that but got stopped out in the following white candlestick that closed @ 1015am est...

    To only see price come back down after that.

    I've attached my own 5min chart eventhough I don't use the 5min chart interval.

    In my chart...

    Signal A: There were two major types of Bearish Divergence via the 15min chart (not shown) and the 5min chart.

    Signal B: Via the 5min chart there was another Bearish Divergence signal.

    Between the two trade signals...

    Signal B had more going for it than signal A because signal B was in the ripples of the terrorist bombing in Damascus, Syria and news being flashed all over the place about the U.S. going on the offensive in Fallujah, IRAK.

    As for myself...I was Long during that
    parabolic price rise but exited and called it a day just prior to the Bearish Divergence signal A appeared.

    I called it a day early because I was pulling double duty due to taking care of the baby via spouse being ill after she ate some bad food the prior day at the mall.

  7. NihabaAshi,

    I notice that you have tick volume on your chart (I am guessing this is simply the number of trades executing, regardless of size). Do you think this has advantages over raw volume?

  8. Kap


    Nihab, I had +ve Div prior to the # @ 10am, what were your reasons for holding long prior/during?

    Tia, Kap
  9. Hi 1contract,

    So far, I don't see any advantages for one over the other (Tick Volume vs. Raw Volume) when looking at hindsight charts.

    However, I do get a different feeling of the momentum when I'm reviewing my live-recordings of QCharts (raw volume) in comparison to my live-recordings of FutureSource (tick volume).

    Simply, the difference I see is that of a feeling...because of such...I prefer tick volume.

    Note: It may be a completely different story for scalpers that uses less than 1min chart intervals.

    Hi Kap,

    I don't know what chart interval you were using nor how many contracts you were trading...

    However, I trade multiple contracts and scale out as I see supply and demand unfold via candlestick s/r levels.

    Under normal conditions (non key economic report reaction) I use the same chart interval for all scale outs.

    Yet, due to the key economic reports at 10am est...

    I first used the 3min chart and I initially thought I didn't do a great job of managing those first couple of contracts (the ones that pay for the trade regardless to the faith of the remainders)...

    I exited @ 1140.50 when I should have exited around 1141.00 based on the after the fact 3min still chart.

    Yet, when I reviewed the live-recording of my realtime charting program and my broker execution platform...

    ES got very bouncy for my taste above 1140.75 up til the exit of 1140.50 was appropriate within that demand thrust into a candlestick s/r level and still above the profit target 1 (PT1) for those initial contracts.

    At this point...I moved my initial stop up into a 1 tick better than breakeven stop for those remainders.

    I will only reverse the trade for those remainders via a Bearish Divergence signal (price action only).

    My next exit was a complete flop @ 1141.00 and not at any candlestick s/r level.

    At this point...I dropped from the 3min chart to the 1min chart interval to better manage my exits for the remaining contracts.

    Then I caught the next demand thrust into a candlestick s/r level between 1009am - 1010am est and dumped one more contract @ 1143.25

    At that point...I still have not gotten any Bearish Divergence (price action only) signals nor any candlestick reversal signals.

    Market continues higher into that pivot point R1 area because I see some traders talking about it along with seeing a few Shorting it...

    The market made a final push and I noticed that the tick volume of the current white candlestick that was now at an intraday high was smaller than the tick volume of the prior candlestick...

    So I dumped the remaining contract @ 1146.00 a whole number.

    My Long entry was 1138.25

    At this time my spouse needed some Ginger Tea due to the sudden increase in her nauseation so at this point I decided to tend to my home doctor duties...deciding to call it quits for the day eventhough I would be checking out the markets throughout the trading day whenever I got a chance. reasons for holding that long as long as I did...scaling out, candlestick s/r levels along with getting no bearish divergence (price action only) signals during the trade.

    P.S. The trade prior to the Long was a Short (smaller sized position) and I was stopped out of it for a 1 point loss.

  10. Thanks for the reply NihabaAshi,

    The divergence signal you are referring to .. what is an oscillator divergence.?? stochastics??
    #10     Apr 28, 2004