I was planning to short the yen but had to run some errands and by the time I got home it had already dropped 70 ticks to the 9.330 area. This is too much of a dip for me to short into, which is too bad because yen has the best case for a position right now (coffee comes close). On the other hand the pound has fallen as well and now is far too negative to stick with. At the 156.30 level there is a clear "island" up top where price hovered for a while but broke through support shortly after. 1 6B sold for a loss at 196.38. (bought at 157.03) Copper had been really thin lately with 15-20 tick spreads, but recently the spread has shrunk back to 3-6 ticks which is good for this market. I was tempted to to do a momentum order on the short side the day after price spiked up almost 15 cents to the 507 area. But I have been very selective with momentum orders recently, my new trend seems to be trying to buy cheaper on an evening dip/rally (which is theoretically worse for odds but better for risk reward) As of right now the markets are continuing their downside pressure so a shot at the long side is still a "catching a falling knife" scenario, but thursday's down day was rather big. This means either serious downside pressure or a good next day reversal. Most markets are still in an uptrend so I still favor that side overall. GHG has fallen pretty decently and has an emerging upside pattern, with trend now turning to the upside (and can be further anticipated up) ML is still strengthening to the upside. While SL is pointing down, it has been in a down cycle for several days and is now at the +10 area. +10 is pretty close to the baseline so even though the SL is pointing down, this can also mean that the market is no longer overbought and ready to once again resume upside pressure. I longed one copper at 387. Stops are wide at 377 to allow for more downside continuation tomorrow. I still like coffee on the upside despite the big down day yesterday, which I think is credited more to intermarket influences than any weakness in this specific market. TL and ML are both strengthening to the upside like copper. 2 contracts bought at 1.5080. Stops also wide here at 1.4675. Risk is high for tomorrow with such wide stops in my positions, but I have to accomodate the market sometimes and here is a situation where the 2+ day outlook looks very good, but the shorter term outlook is much harder to anticipate.
Pretty bad day overall, obviously jumped the gun and bought when I should have waited for the situation in the markets to become more favorable. This is not the first time I did this but at least I bought at a pretty good price in copper which minimzed today's losses. Coffee had an incredible spike type down day so I was completel wrong in that market, it was far weaker than I thought. Large loss in that market because of the wide stops that were taken out. Interesting to note the the euro rebounded fairly well today after the news realted downspike on thursday. News related spike tend to reverse and while this one did not reverse completely, price momentum was towards the upside during the day session. With large price spikes in many markets it may be worth it to use momentum orders to catch some spike reversals.
Ashan, you might want to ponder the question of whether your early successes were due to simply taking Chick's calls. If you find that you are now struggling because Chick no longer produces the newsletter, it would be prudent to cut back on your position sizes until you feel totally confident in what you are doing. The markets can take those early gains away from you just as soon as they were earned. It's usually not a good idea to use wide stops unless there is a corresponding increase in reward.
Yes June was my best month ever. It was still influenced by Chick though because I called him a couple times and he put out that email at the end which gave me a good end of month boost. I probably owe about $10,000 in gains last month to Chick. My problem continues to be waiting for markets to offer good odds for swing trades. Easier said than done but I am starting to spot patterns in my thought process that indicate when I am trying too hard to speculate. I'm way behind schedule so I'll have to skip my rationales for today. Copper sold at decent loss for 3.8405 today. Between this trade and coffee I jumped the gun. This is evident by me posting this: Translation: I want to try to get in earlier than I should. I could hit a home run this way or also suffer a loss that I will try to ride through for a day. Today the outlook looks better in some markets. Normal positions for today: Long 1 natural gas at 12.896 (This is another knife catcher situation but in natural gas this has paid off) Long 1 euro at 156.66 Short 1 wheat at 8.3725 Momentum trades: Short on coffee triggering at 140.35. Both sides of cocoa. Long set to trigger at 2955, short set to trigger at 2800.
Another bad day. The coffee trade was chopped with an intraday dip/reversal for a decent loss. Natural gas was stopped out after another big down day for a decent to big loss. Despite being the weakest in its group. wheat held even while corn plummeted and soybeans fell decently. The euro had a small down day as well. What particularly surprised me was the weakness of natural gas today, there is now a large 2 day dip that stands out on the charts because of the magnitude of this dip. Along with crude oil falling back down to 135, the energy group may have finally ended their long bull run. I felt that something was up in natural gas 1-2 weeks ago because both ML and SL were so high and ready for a big down move, but after NG continued its strength for some more days I wrote off the short term lines as being incorrect once again in this perpetual upside market. It seems many markets are making big reversals right now. If this is the case then risk is exceptionally high. But they could also be on larger than normal dips, just no way for me to know. Only thing I can do now is not try to chase after my recent losses and keep a more skeptical eye for another week or 2, making sure to also keep positions light.
Most markets in the stocks, energies, grains, and financials are in strong crosscurrent modes right now and very unappealing for a trade. There is an emerging concurrent mode to the upside in the financials (bonds and notes) but even here the SL in on highs and trend is only weakly up so I still don't like the upside. Metals are also mildly concurrent to the pside but appear to be weakening, and are haivng very poor relative strength right now with platinum the weakest, then silver, then gold. This is the order that indicates downside. Pattern is also not that good until the SL turns up again. Wheat is still a decent short but I decided to sell it at a wash along with the euro for a small loss at 156.12 and go back to cash. I need a few days off and this is a good time for a small vacation.
I'm feeling a bit down today, a girl I was seeing started complaining that I spent way too much time involved with futures trading and told me I was obsessed. At first she was happy with my trading because I made my money in a somewhat entrepreneurial way but she had been lately comparing it to gambling. One of her friends told her that futures was one of the "worst" ways to invest because of the leverage. (I bet he blew a $2k account) Her ill talking got to the point that I decided to end things with her. This is almost certainly going to affect my trading for these next few days, I may be too aggresive or conservative and when I need to make smart subjective decisions I can't allows these factors to affect me. So it's very likely that I'll post no trades for this week. Some brief comments: Stocks tend to reverse quickly and strongly when on a prolonged downtrend. Chick has always felt that some government intervention may be involved because these sharp trend altering reversals happen on the downside of stocks more than any other market, I've seen a few days that this was indeed what looked like a factor in the market. It's never worth it for me to try to time one of these but I would like to see stocks start an upside move soon. The euro currencies had a good up day today. I have been trying to anticipate more than usual and was chopped on this trade. Same with wheat which dropped a decent amount today. Just too much anticipation on my part due partly to the recent volatility. Natural gas looks like it may have finally ended its great bull run. It has fallen down into the 11's after a large 3 day dip. I knew logically that it would happen eventually but did not intuitively feel this. Chick noted in his last letter (a week or so ago) That there are signs emerging of the energies making a top (temporary or otherwise). Not only did I not see signs of the top myself, but i did not weigh his advice into my decision making like I normally do and took the natural gas trade a couple days ago that posted a decent loss. I just don't know how he sees these things. Sometimes I see Chick's market reading ability as some kind of special power Energies and softs are in an extreme crosscurrent mode right now with trend solidly up, ML and SL both plummeting down. Currencies and grains are starting to go crosscurrent, a stronger upside action could hold this off for a bit longer. About same situations with the metals. Financials are continuing their up move, it is just too risky for me to try the long side right now. I would love a few days of neutral or a small to decent sized dip here. It is a relaxing change of pace to be back in cash. With my recent complete change over to short term trading I have been making more decisions than usual and my trading may have been starting to deviate again with too much anticipation and attempting to buy on intraday dips too much. One thing I would love to have control of is the ability to enter the markets only when conditions are favorable, and stay out when they are not. Thing is this can mean a lot of sidelines time and taking less trades will increase my volatility if there is less action going on. (since drawdowns will go on longer) For now the market conditions and my own headspace is so unfavorable that staying on the sidelines is an easy decision.
Wise decision...come back when you feel 100% at your best...I guarantee the markets will still be here