I trade the ER2. My method is tape reading. I look at the intermarket relationships and trade whatever the market tell me. I look at the following: RUT, COMP, SOX, BKX ER2, NQ, ES, YM AND KLAC (my indicator stock) I use 20 and 34 ema on 2 and 5min chart. I've been trading 3 years now. If anyone uses a similar method and would like to form a small trading group please PM me. The reason i ask is that i hope to form a group where we can share our thought process of reading the tape and improve our trading. We can use AOL, Yahoo messenger or other software to communicate. Thank you
KLAC is a very active stock. It is one of the leader stock of the SOX. Stock movement is related to the futures movement as well. For example, today I shorted ER at the high because i saw weakness in KLAC and the SOX. All morning KLAC and SOX was the strongest component. It did not drop much as the ER, ES and YM tank. It lead the rebound in the market. At the high of the day both the SOX and KLAC started to stall while ER broke new high for the day. Now, if leaders turn iinto laggard it only mean one thing...BUYING IS OVER. Thus I put on my short on ER. My mistake was that I cover too early because both KLAC and SOX still continue to show weakness. Also sometimes I see the SOX broke new high or low while KLAC does not. That mean there is not enough buying or selling in the market.