Professional Day Trading

MON - 12-20-2010 (OVERNIGHT-OPEN)

MACRO – On the daily charts, the ES has broken out of the 1200-1050 bracket on the way to the 1280 area. Currently price is in an uptrend and trying to break above the 1240-1230 area with big picture 1220 pullback to swing support if price moves below 1230. If price moves above 1240 area there little resistance overhead on the way to 1280.

OPEN - Overnight price moved from bottom to top of 1240-1235 chop on Friday. Day session part 1 and price/volume formation should tell us if the gap up is accepted or rejected. If accepted there is little overhead resistance to 1280 until intra-day structure changes (key on proper pullback to swing support if a down bias develops later in the session) . If rejected, look for a move to 1235 support to start, then 1230, then 1220 with each break

 

MON - 12-20-2010 - (DAY SESSION PART 1)

GAP/FIRST MOVE/FIRST RETRACE - After a gap up the first move of the day was lower with a fade the gap price/volume sell at 1242.00 and once price broke below 1240, 1235 overnight low area was the first target.

Price is now in the middle of a wide overnight range which also happen to be 1240-1235 chop for the last two days.

Structure wise, the bias is down as long as 1241 resistance holds, and yet mechanically price is in a chop area for now.

Stay with down bias and be careful of 1235 area support for now. If price is to head much lower the likely scenario is to go sideways for awhile, with failure to move higher above 1240, and then a break down later.

Look for long trades only with failure near chop lows and a new price/volume bias up (chop long entry), or some type of new swing high later in the session which will take time to develop.

The wide overnight range is likely to make directional trading tricky for a while, and well placed scalp trades seem best for now...

 

MON - 12-20-2010 - (DAY SESSION PART 2)

SUMMARY - A nice C2 sell developed just before 10:00 for a swing lower to test the 1235 support area based on the 1240-1235 chop range.

Next, a price/volume counter-trend long developed near 10:30 for a move higher to test the expected 1241 resistance area.
At 11:30, 1241 became an area with conflict because this could be a nice intra-day structure sell area as long as 1241 resistance holds, but at the same time all the price/volume/pivot trading signs were up. The only trade opportunity here was an aggressive buy just after 11:30, but it was also fine to stand aside at this juncture as well.

At noon intra-day structure was now up, and a nice long set up developed around 13:00 for a move to test the overnight highs near 1245. Once the 1245 target was reached, wait for a deeper pullback to consider new longs that will at least give price room to test the highs of the day late in the trading session.

A deeper pullback started at 13:30 but no price/volume long trade setups ever developed before the trading session came to an end.

 

TUES - 12-21-2010 (OVERNIGHT-OPEN)

MACRO – On the daily charts, the ES has broken out of the 1200-1050 bracket on the way to the 1280 area. Currently price is in an uptrend and trying to break above the 1242-1230 area with big picture 1220 pullback to swing support if price moves below 1230. If price holds above the 1242 area there little resistance overhead on the way to 1280.

OPEN - Overnight price held above 1242 and reached a high of 1247.50. The mechanical trend is up as long as 1242 area holds. Look for price volume setups early to see if there is upside follow through (no resistance above), or a fade the gap pullback sell to start the day (1242 area support) and then analyze first move/first retrace structure to get a better idea of what type of day is forming.

 

TUES - 12-21-2010 - (DAY SESSION PART 1)

GAP/FIRST MOVE/FIRST RETRACE - Price gapped higher, and spent most of the first part of the session coiling with no clear trade signals either way.

This usually signals strong continuation, so look for a trend day up to form from here and monitor intra-day structure to see if an strong up condition unfolds and holds or not.

After essentially 6 days of overlapping price action, and a coil near the open today, price is looking for a new level, and the upside seems to be the path of least resistance until intra-day flow changes.

 

TUES – 12-21-2010 – (DAY SESSION PART 2)

SUMMARY – Big picture analysis coupled with unfolding intra-day structure pointed to trend like conditions early, and price did trend higher all day in continued slow holiday trading.

It is best to trade trend days passively, and the best way to profit today was to patiently hold long for most of the trading session.

With no overhead resistance until 1280, and 6 days of daily overlapping price action, price is moving higher to search for new patient sellers, and we will monitor to see when patient sellers come in to form the next resistance point above.

 

how about a video of your trading, or at least a chart with entry points?

 

In many of the posts throughout this thread I have listed the the exact time/ price for entries based on the way I tie developing intra-day structure into the bigger picture analysis. presented.....so I am trying to show where the highest probabilities entries form relative to this style of trading...

 

WED - 12-22-2010 (OVERNIGHT-OPEN)

MACRO – On the daily charts, the ES has broken out of the 1200-1050 bracket on the way to the 1280 area. Currently price is in an uptrend with no clear resistance and we are monitoring to see where the patients sellers come in. Monitoring yesterdays high ( overnight high) near 1251 to see if this becomes a resistance point, or not. If price moves below 1249 it will confirm a 1251-1246 consolidation area to monitor, and below 1246 takes price to 1242 support. If 1242 is taken out then price moves back into the 1242-1230 consolidation. Otherwise, the trend is simply up until an intra-day structure development changes the up bias.

OPEN - Overnight price is holding its uptrend from yesterday and consolidating around 1250 an hour before the open. While a clear uptrend is in place, an opening trade is tricky with price hovering around the 1250 area. An aggressive trader should only be long, and you can take any price/volume setup early that develops, but in this slow environment it is best to be more conservative to see what structure develops early in the session before looking to trade.

Frankly, there are just a few select opportunities each day in this slow, end of the year environment. There's not that much to do, price action is slow, but with patience there still seem to be a few good trades each day according to unfolding structure relative to the unfolding flow of support- resistance.

 

WED - 12-22-2010 - (DAY SESSION PART 1)

GAP/FIRST MOVE/FIRST RETRACE - The only trade opportunity near the open was to get long as part of continuation of the slow uptrend that has been in steadily in place since yesterdays breakout of 6 days of overlapping price action.

Price continues to hold its uptrend searching for higher prices to see where the patients sellers will enter.

Structure wise the up bias remains in tract until the 1249 is taken out, or if a subsequent swing low is taken out later in the session which will take time to develop.

Although not classic trend day conditions in terms of the Advance /Decline line and Dow price action is continuing to display trend like conditions higher, so like yesterday, the only option is to patiently hold long for now, and trail stops below the bigger picture lows that develop (move stops to break even when appropriate). hoping to exit into bigger picture swing highs later in the session as you monitor the rhythm of unfolding price action.

Perhaps a new swing low with volume confirmation will turn bias down later, but no signs of that yet.