Drats... ET wasn't working for me from my Chrome browser so I thought it was down, but I see its working from IE, so I have less time to do a thorough post of my prep. Overnight, we have been dropping, from a high of 3584 down to a low of 3560. We have found support several times now at this level in the past few hours, so this is the level to pass through. We make a series of lower highs, but haven't been able to push through 3560. On the hourly/daily chart, my channel once again just doesn't line up with Db's as precisely as I would like. I have even gone to the CME to check their charts, looking for important swing highs and lows to try and connect with straight lines, and if I connect the lines to work for early March, it just don't line up to where we are now. So my channels and their means are off by at least 10 points in comparison to Db's, and hence this leaves me a little lost. At any rate, LOLR is down, level to breach is 3560.
Thinking about that too... there are actually lots of levels on the way down. Looking to the left, price below where we are not had moved up slowly and incrementally, so there are many swing lows that were bought up, and many areas of congestion, practically every 10 points or so. Hence, looking for the next level is almost a staircase and choosing what step to focus on is hard. Will just have to use SLA for the drop down I think.
A - Pre-market, we drop below 60. I am including a 15 sec chart of this action. It almost appears as if there were no trades between 60 and 58, and yet when I plot the volume, that one bar is over 1000 contracts in pre-market! Would love an explanation if someone can shed some light. Shorting below 60 is exactly what I was looking for, but this type of action was just a bit unfamiliar. Its interesting that we rally up after this drop and get to 60 again right at the open. B - The second short I was trying to take, but just couldn't get the order in fast enough. The poke above 3560 and REJ at 3561 was just screaming for me to short. Not sure if I would have been filled mind you. C - The REV at 3548 is unexpected. Now it certainly seems like a DB, but you can only be sure of this a few bars later. D - We climb up to D, but for a few bars, we see that price can't rally past 57, so this looks like good confirmation to still be a in short, call it a failure to go above the opening high, and to even get to that 3560 level that was so important. E - Here we form a higher low from C, but once again, this probably isn't obvious until a few bars later, where we break the 3560 level. F - We do form a higher high here, but turn around yet again. G - Here we form a higher low. If we drew in a DL connecting C and E, the action here at G is breaking the DL, but the break isn't severe, and within a couple of minutes, we reverse to back above the DL. It really takes me this long to figure out that we aren't going down anymore, even more so, perhaps not until we breach the highs of F and get above 3563. By this point, the trade to go long is of course gone. H - I started to see this hinge form, and although price does break out the bottom of the hinge, I think it looks nicer if we just ignore that. So what we have is a hinge, with an apex of 3572. On closer inspection, this level of 72 happens to be the mean of the overnight range of 84 to 60. So it makes perfect sense why this hinge forms here, why we have this area of consolidation here. This of course wasn't arrived at pre-market, so it was of no use to me in real time, but plotting it in now for discussion. I don't really draw in means of ranges if the high and low hasn't been tested a few times. Hmmm... now that I look, I do see 84 being tested a few times, and 60 was of course tested many time in the few hours before open, so perhaps it should have been drawn in during prep. I'm just used to price going up and down many times within a range, not just testing the top, and down to the bottom and not back up again. I - We break to the upside, and still are well above our DL. But since the move has gone so far from the bottom, I just don't want to think about entering a long for fear it will just turn around on me. J - We hit the overnight high of 84 and appear to REV for a few mins, but it doesn't take. K - Next we hit a high of 88, the mean from yesterday which was quite pronounced. This certainly looks like a much better short, but this too doesn't go far. We eventually do have a break of our DL and would have had a RET to go short now that I look at it closely, but I'm just not in the mood to look for trades anymore, and this would have led to a scratch anyway. L - Break above 88 this time, which also doesn't go far. From here on in, we just go sideways. The failure to that that initial short is where I went wrong today. I hesitated for a few seconds which is what cost me not getting in. The second thing that is bothering me is not seeing the long. I kept thinking we need to clear 3560 first, which I still think is sensible, and its probably not until we go above 3563 and for a new higher high that the long looks like a good trade, but its risky then of course. Maybe I should say we formed a higher low at E, but going above D at 3558 would have stopped me out for sure, and I just didn't want to go long below 3560 anyway. So its a bit disappointing to not take any trades to day, especially since we went from 3550 to 3590. I am mostly worried about my short that I didn't get in on, even though that was only a 10 point trade at most, and yet I didn't even consider the chance to go long, which was 40 points (not that all 40 points could have been captured of course). How to fix this? Hmmm.... the hesitation needs work. Looking for more confirmation I know is just silly, and too costly in terms of price risk. I also need to focus on price right now and not let previous failures to go above or below a certain level affect me too much. If price never broke these levels then it just wouldn't go anywhere. It sure is a balancing act, to remain open to price breaking a level, but being aware of that level as an area beyond which traders couldn't find a trade.
Yup.. I was hunting down Db's analysis for today... where the heck was he before the open??? LOL... I'm torn now between just dumping everything I think and following SLA. My analysis keeps me out of many trades. Sure it helps me get into some, and Db is telling us to stay away from the lines, but I hesitate too much on the REVs. Now never mind about me, I am eagerly awaiting your results today. Any live trades? Edit: I do like my analysis, it is solid. But its keeping me out of trades, and to make money, you gotta put on trades!
Today is going to be much like yesterday. We hit a high of just under 3604 overnight, so shorting that was the trade of the day! We are currently working our way down, so the mean that Db outlined of roughly 3588 for the past few days should still be important, although right now we are already below this at 3585. Given that we have come down overnight, at the open traders may make a run for testing 3604/05 again, or we might just continue down again, with 3570 being an important level, or 3548 as the low from yesterday which was the 50% move from the top to the bottom from over a week ago. I will try and make sure to also use SLA today since yesterday, not being aware of it early enough made me miss the entire move up. What isn't escaping me is that there really are only one or two trades every day that are necessary. Today shorting at 3604 from overnight was that trade, and the next one will be going long when we hit the bottom somewhere down below and reverse. I of course will have to keep trading at every turn because of my inexperience and unwillingness to let price go against me very much, but I do see that in the future, hopefully I will just be able to mostly sit back and let traders fight it out on the way to the predetermined target without getting caught up in every twist and turn.
No trades again today... so instead of looking at what happened in great detail, I will post things I see now of what I should have done. We were stuck in a range for most of the morning, between 92 and 80. At first we did trade around the mean of 88 as outlined in prep, but not much we could do there, and then it evolved into a larger range, so once again I was waiting for something more definitive that just didn't come. A + B - these show the bounds of our range. As price was unfolding, the limits weren't yet known or tested, but here they are now. C -We hit a low of 86 and go back up. D - Reaching almost 92 but reverse. Here we can initially start drawing in the pink resistance line, but of course its just a "soft" line because I don't want it to prevent me from thinking we can't go above it. E - Here, the bar opens on the high, but coses on the low. I should be thinking "hmmm... we failed to even reach the high of D" F - Here, we get to the low of C at 85, but what will happen. If we penetrate, I should have gone short, partly because we breached the previous low, but also because we tried to go higher at E but couldn't, so then traders will try the opposite. So I'm marking in the short that should have been taken. Price will come up again and test 85.50, so that maybe have scared me, but it is to be expected. G - Why we turn around at 80 I'm not sure. We have a previous swing low from yesterday here, and I see this level playing a role in many days before, but we are in an area where every 10 points seems to be a level of some importance, so its tricky. From here on in we just keep bouncing around the range. The mean of this range ends up being roughly 85/86, but of course each time we hit an extreme, I am worried about a BO, so not thinking of REV. H - We keep bumping up against 92, but only once do we go down to 80 again, so I'm thinking eventually we will break through to the upside. I - Here we start forming a firm level that we cannot crosss, the mean of this range, which once again makes me favor up. J - Bit of a poke here, but it doesn't take. On the way down is where we confirm that 85 is the level to provide support. K - This time, we even fail to reach 92 and stop at 90. A big clue, in hindsight. L - Right about here is where I start thinking maybe I should look for a short if we penetrate 85. I have some room to get down to 80 and hence could get out if we bounce off 80, and if we do in fact penetrate 85, this could be strong since we are trying to go up but can't. Hesitation on my part, but this was clearly a good trade. Will plot it in as going short at 84 since it was in the back of my mind, just the finger didn't react! M - Breaking through 80 this time works, and although it doesn't go far, this move if taken at 84 certainly had some good profit in it. We stop at 72, slighly higher than 70 which as a level I had outlined. N - Classic test of the level we broke out of here, but price is just settling into a range again. You can see on my chart the remenants of the SL from overnight. It gets broken, but the price action early on made it obvious that we were going to range so using SLA today wasn't as helpful. Today was tough, no doubt about it.
Really have to start taking a bit of the long term view. My brain is slowly putting together everything that Db has been teaching for the past few months, and although the "in the moment" price action is sometimes not playing nice, the larger swings are so often pretty much textbook. I mentioned earlier today that the trade of the day was the short from overnight at 3604. The mean of 88 had played a pivotal role all day, and although we refused to go down during the first 90 minutes that we are trading, I had a hunch that when we do start going down, I had a very clear picture of how that would look. On the way down 70 was a level that I had outlined, and price did stall here for a bit. Then 60 was another level, which too provided a ledge for price. But ultimately, those lows at 48 is what really caught my eye. And the posted chart shows where we are just a few minutes before the end. If only I had the confidence and the bankroll to be able to hold through longer swings, trading on a larger bar interval chart seems almost easier! Edit: I missed that earlier short after we broke out below 73, so I didn't want to chase the market down. But my gosh, I had such a good gut feeling when I saw this and though that 48 was going to be quite a realistic target.
Overnight we hit a low of 3541. In the past hour we are quickly moving up, not surprising since we hit that low of 3548 yesterday. I have plotted 50% of the move from up to down as Db shows, which would be 3572. I know I have quite a few lines across my chart, but I don't find them too distracting, if anything, they keep me from thinking we are just in the middle of nowhere. On the channel front, I am attaching that chart as well. This is a little more difficult. Lateral lines are so much easier to plot in because its obvious where the levels at which traders can no longer find a trade are at. But these channels have more of an art form to them. I haven't changed the channels for over a week now, and hence, we are either above the March channel, or below the end of April channel (red one). So I'm not seeing exactly what this is telling me just yet. Where we are now is that traders couldn't find trades below 3541, and then quickly reversed up. We seem to have bounced off 3565 but there is still an hour before open so I will have to revisit this. If I knew my channels well, I would be able to have an expectation of visiting a mean or the UL if the bounce was from the LL, but I don't have the benefit of this so have to just watch price without this added benefit.