2013-04-23

BTFD

What the f*** is BTFD?

I have no internet today. Trying to get along on iPad with mobile network. May be this is good for both $AAPL and $FTE (France Telecom) both of which I have bought.

Since I am forced to spend too much time on twitter, I came across once again and again and again the term BTFD. What does it mean? May be I am missing out on some special technical indicator.

So I decided to solve the riddle and throwing all my procrastination aside, I googled the term.

BTFD - Buy The F***ing Dip.

Is that it? The secret sauce? The holy grail? The bushy fountain? (ok let me stop here). No wonder I was on wrong side of this whole bull market :-)

BTFD - that's all you want.

BTFD - that's what we all must do.

More details here

I am off to BTFD.

Meanwhile enjoy a sample of my new art on iPad.

2013-04-19

$ES_F : 1545 - 1525 : Market Recap


Opex Madness - Do not fall in love with the upside (yet)

Trend change confirmed. Trading from bearish bias.


Today was April options expiry and markets reacted in some strange fashion. On one hand a healthy sign for bulls is that


  • Weekly trend change is not confirmed and markets managed to close above 1543 even though in the lower half of the weekly range.
  • Rally from 50 dma has been propelling markets higher. Each of those two rallies have been impressive and uncorrected before they are sold again. So far these corrective rallies look like making lower highs lower lows strengthening the case for bears.
However the volume on selling legs of the market is improving and any rally is building up protection buying. This is similar to situation which was prevalent in AAPL a while back before the sharp break started down. The current trend is short but it is a young and tender trend, it can be be broken easily if some determined bulls come to the party. I have started trading from the short side with caution. Here is a 5 minute chart of today's day session.



$ES_F : 1545 - 1525 : Expected Day Session Range for EMINI

Trend has turned bearish. Move to 1500-1450 under way.


Selling Rallies


The market is developing a well established rhythm of breaking new lows on high volume followed by low volume recovery. The volatility has increased causing the size of reaction and subsequent falls to increase (which is better for trading perspective as long as proper risk management is employed). Market is being supported by the 50 dma and so far it has acted as good support but I would expect that to be broken in coming days. It appears that a move to 1500 - 1450 area has begun. I will update the comments section as the day develops which can be subscribed for email triggers.

2013-04-18

$ES_F : 1555 - 1540 : (Early) Market Recap

Bears are getting strong.


Trend change confirmed. Trading from bearish bias.


Today is an early market recap for me as I have to go out for a lovely dinner but it seems my day trading is already done.

Markets are progressively confirming that the control has been shifted to bears and therefore trading from short side is making sense. I am getting comfortable holding short positions. The volumes are increasing on the selling legs indicating longer term players are taking profit or establishing short positions. New short sellers are also appearing to hold the shake-out attempts well and defending key levels showing the confidence of the markets to go short. I am looking for a move to 1530-1500 initially going all the way to 1450-1400 area. 1593 is marked as important top on my charts and key pivot point to trade from. Here is a 5 minute chart of today's day session.


$ES_F : 1555 - 1540 : Expected Day Session Range for EMINI


Cautiously Bearish. 

Near important top. Volatility Expected


The choppiness near the top is creating a set up of possible pause in the rally. Yesterday was a good follow though day for bears coupled with high volume selling. However support was noted at 50 dma and so far that has provided a good 15 points rally from the low. The markets has so far not rejected the 1538 low. However the line in sand for bears is 1558 and hard stop at 1570. If markets starts rising beyond 1558, bears have once again lost strength. The trend is still on the mixed now with bearish bias and there are several signs indicating a fatigue and I am not planning to take a big position either way. I will update the comments as the day develops.

2013-04-17

$ES_F : 1565 - 1545 : Market Recap


Finally a success for a bears.

Important top formed at 1593. Trend change in making.


After a feeble low volume attempt to shake new shorts, the market could not entice new buyers and finally we have a good confirmed short set-up immediately in the vicinity of a top. The following are supporting the top formation and possible trend change.


  • The rally from 1533 to 1593 was a straight line up move, followed by equally strong move in opposite direction with increasing volume. These capitulation tops mark important turning points for the markets. 
  • The short set-up has held on the move down and bears have shown a follow through.
  • The macro economic climates has been screaming for a correction/pause in stock market rally for a long time. Any other indicators (bonds, metals, china, emerging markets) have not been supportive of the rally.
If the current move has strength, the first target would be 1500 - 1450 area. And if the bears have legs, a trend change on longer term time frame could develop requiring a new analysis. Here is a 5 minute chart of today's day session.


$ES_F : 1565 - 1545 : Expected Day Session Range for EMINI

Cautiously Bearish. 


Today is the follow up day for bears to take the market down.


The choppiness near the top is creating a set up of possible pause in the rally. Yesterday I was expecting S&P to remain below 1565 to keep the short side trade intact but instead it moved up. In pre markets session today, it is trading around 1557 giving up most of yesterday gain and leaving a nearly 10 points gap down, yesterday market had a gap up which was never filled. These sort of situations demand caution. The trend is still on the bullish side but there are several signs indicating a fatigue and I am not planning to take a big position either way. I will update the comments as the day develops.
 

$GBPUSD $6B_F : Mighty Pound could be in trouble

Sterling is looking seriously week on longer term time frames.

1.4525 area as possible next target with further downside possible.


Before 1944 British Pound was once the reserve currency of the world. Today less than 4% of worlds reserves are kept in GBP but even that makes it the third major currency in the global reserves game. But progressively British world dominance has declined together with decimation of its industrial base and over reliance of the economy on financial services. After hitting a peak of 2.1160 (not all time high but high in last 20 years) Sterling has progressively given ground against US Dollar and during the 2007-2009 financial crisis it plunged as low as 1.3502. Since then GBP has been in a very tight range for last 4 years failing to move either way out of the range. Here is a weekly chart of GBP since Oct 2007.

2013-04-16

$ES_F : : Market Recap

No Cigar for Bears (once again)


Market Seems to have rejected first attempt down.


I return from a nearly 3.5 weeks holiday and I find things the same. Markets are strong and rejecting any attempts by bears. S&P made new all time high ensuring all major US indices (DJI, RUT and SPX) have made new all time highs and it seems now even Gold bulls have thrown in the towel and embraced stocks.

Until something changes it is fair to assume that trend is favouring long side. Here is 5 minute chart of today's day session:

2013-03-25

Cyprus : Capitalism is back

After long negotiations, the EU group, IMF and Cyprus announced the deal in early hours to resolve the ongoing crisis which engulfed the tiny country for last 10 days. The financial systems were shut down, banks were locked, money was rationed, credit card payments ground to halt and all commercial activity virtually stopped.

On many counts this deal is lot better than how earlier bailouts were handled and the cost of collapse has been put on parties which should take up the cost in true capitalism instead of distributing the pain on wider tax payers. For a long time the bailouts were handled in socialist way where by the losses were spread around, to tax payers, to govt debts and to general public. Creating a skewed risk reward. Privatised gains but public losses. In the name of contagion or systemic failure, banks were bailed out with public money with minimal pain to the parties which should be first in line. The Cyprus rescue changes few things fundamentally:

2013-03-21

$ES_F : 1542-1552 : Market Recap


Bears are back in town.

Flip Flop continues. Caution required.


Finally it appears the markets are catching up with the reality in rest of the word. The Cyprus situation is escalating and I cringe just to watch it on TV. No credit cards, no electronic transactions, cash only deals, withdrawal limit on ATMs, banks closed till next week. This is not the environment for bull market highs. The bullish set-up is once again broken and market continued its flip flop move. My experience tells me that this is start of key moments for markets because such flip flop shows markets is struggling to find a direction and it usually marks a trend change. If I am reading right, move towards 1500 has started. Here is the 5 minute chart of today's day session....

$BCOIN : My experiments with Bit Coin

They say this is one currency no government can control.

What it is, how it is used and why you should care. 


The recent crisis in Cyprus where the banks have not opened for this week and there is a growing fear that "if and when" they open, there will be a bank run there is a lot of talk in blog-sphere about getting your freedom from Govt. controlled currencies and in that aspect BitCoin is one such currency which grabs your attention. I wanted to write a detailed post but thank to +Geoff Taylor's comment on my facebook post I got this excellent link for "all you want to know about bit coin". After this there is not much point in repeating what is already said and instead I created this post to note my experiments with $BCOIN - a new entrant in the forex market. 

So, as a start I got my BitCoin wallet. At the time of writing the bit coins are trading BTCUSD 73.0000

I am yet to open accounts with exchanges and may be buy my first bit coin. However if anyone is feeling generous, please feel free to make a donation to 1PAFHcY7CnuwM2KFW6DAo845XQz51gmBdN

I will keep updating the comments on this post to add more of my experience with BitCoin.

$ES_F : 1552 - 1542 : Expected Day Session Range for EMINI


Cautiously Bearish. 

Cyprus is not fully priced in I feel.


The news from Cyprus is not improving. Today ECB threatened to pull liquidity by 25th March thereby putting a firm deadline for the Cyprus to act. In return Cyprus govt postponed vote on the plan B and announced that deposit levy is not in consideration. Russia is now playing in EU politics and I would not be surprised if this results into some new conflict as well. Germany and Russia are not the best of friends after all. The Cyprus defiance is prompting Greece to rebel against the bailout terms. British savers are fretting about their savings. The banks in Cyprus have not opened for a week now. Merchants are refusing credit card payments. Cash is running short. RAF plane is in Cyprus with cash for British personnel. We have not seen such events in a long time. We can put all our trust in politicians to resolve the issues and keep buying with both hands OR we can take stock of the situation and exercise caution. May be EU will relent and renegotiate and send a bundle of cash for bail-out without demanding bail-in. May be Russia will step up to the plate and bail out an old friend in return for military and gas exploration rights. May be AAPL will buy Cyprus island with all the excess cash sitting on its books. Who knows. May be Cyprus will leave Euro all together and go in the arms of Russia. Market is paying no attention to this event so far and going up in stride. Is this a bull trap? Is this a sign of strength of the market? I do not know. All I can see is that markets are bullish and short set-up is again broken. However I am really cautious on long side today until weekend. I will keep a keen eye on news from Europe until the mess is resolved.

2013-03-20

$ES_F : 1544-1557 : Market Recap

Business as usual - grinding high.


Short set-up broken again. 


These markets are strong. Overcoming any thing thrown in its path. Breaking any short set-up before they are even fully developed. For how long. Out side the fed protected world a lot of crazy things are happening. In a tiny island the banks have not opened since 15th March and are not going to open at least until 26th March. That is nearly 10 days of bank closure.  These are not normal times. We might hide our head in sand and think a tiny island does not matter but a big dangerous game of geo political poker has been put into play and in which everyone is going to lose. The worlds is changing. I feel it in the water, I feel it in the earth, I smell it it in the air. The set-up remains bullish but my caution level are at extreme high. Today Fed came out with continuation of QE. The market reaction however seems to indicated the the high induced by FOMC promises of unlimited QE is progressively getting weaker. Here is the 5 minute chart of today's day session trading.

$ES_F : 1544 - 1557 : Expected Day Session Range for EMINI

Cyprus Fears seems to be discounted in pre-market.


However caution is required until the dust settled.


Cyprus parliament has rejected the deposit levy leaving the crisis in limbo. No one knows when their banks will open and what will happen when they do indeed open. May be EU will relent and renegotiate and send a bundle of cash for bail-out without demanding bail-in. May be Russia will step up to the plate and bail out an old friend in return for military and gas exploration rights. May be Cyprus will leave Euro all together and go in the arms of Russia. And in all these uncertainties the markets are enjoying, completely reversing the fall yesterday. Is this a bull trap? Is this a sign of strength of the market? I do not know. All I can see is that markets are bullish and short set-up is again broken. I will keep a keen eye on news from Europe until the mess is resolved. There is FOMC announcement today which is not likely to cause much unless Bernanke starts talking about reducing liquidity.

2013-03-19

$ES_F : 1544-1556 : Market Recap


Cyprus problem is not a small problem.

Short Set-Up held and markets looking weak.


The worlds is changing. I feel it in the water, I feel it in the earth, I smell it it in the air. I was suspicious of the market price action yesterday to the bad news from Cyprus and wrote this reply to a bullish tweet on twitter.  The problem which started at the tiny island of Cyprus is deteriorating. The banks are closed until Thursday 21st March 2013. They cannot open banks without passing the bail-out bill or else it will result in tremendous bank run and will collapse the banking system in Cyprus and along with that in Europe. The government is not able to pass the bail-out bill which imposes punitive raid on bank deposits. There are rumours that Finance Minister has offered to resign as if that is going to help the situation. UK is sending a plane full of cash to Cyprus to assist British personnel in case the banking system is not operational. These are the kind of news which cannot be brushed away. Coupled with the fact that we are near the resistance levels in markets, it is ripe for a decent pull-back or correction. And whatever the politicians say, grabbing bank deposits sets a very bad precedent. Once a vampire tastes blood ..... Here is the 5 minute chart of today's day session trading.

$ES_F : 1544 - 1556 : Expected Day Session Range for EMINI


Possible attempt at all time high likely.

1540 is key level for bulls to defend.


I have not been able to trade much of last week due to my other business commitments but as I can see, markets have been range bound progressively grinding higher. My chart still had 1552 - 1542 marked and I see we are still trading around there.

A few things stand out. Markets have made a new high after another new highs and grinding higher. All attempts by sellers fizzle out within 1 - 2 hours of trading and then the grind upward starts. Even bad news like Cyprus have no impact on the tone of the market and markets are making smart recovery. But I feel a lot of protection buying is going on at these levels and it is visible from the action in VIX. I am also buying protection 2 - 3 years out at 1000-800 level. A cheap insurance sort of for a calamity event.

2013-03-17

Jogging Through Historical Mottingham, Chislehurst, Petts-Wood and Bromley

Nearly 10.5 miles route via gentle hilly terrain.

World war II gun site, wood lands and parks.


IMG-20130310-WA000
To celebrate completing 125 miles (nearly – just 2 miles left – it can be called a rounding error) running since I started using Runtastic app for tracking my jogging activities, I decided to write about a new route I took this weekend. Since I started using Runtastic I have managed to use it in 3 countries. My last post about running in Hong Kong is here.

I try to do a moderately long run (6+ mile) every weekend. Well it may not be long by standards of some who run a marathon or longer but for me who started road running since July 2012, it is long enough.

What amazed me is that in our usual day to day chores we forget to witness many historically significant spots. For example I could not imagine that a place near my daughters school, just 70 years ago was a world war II gun site protecting London. The dark skies above the rolling woodlands constantly lit up by the gun fire and the silence of night broken by the the splattering sound of shots and clanking of shells falling on concrete floor below.

The weather was too cold and freezing for me to remove my gloves and take pictures from my blackberry. Instead I took mental notes and then searched internet for the links of the places I passed on this route. None of the pictures (expect the screen shot of my phone above) are mine and copyrights of the original owners are duly acknowledged.

The Route

2013-03-12

$ES_F : Market Recap

A pause in rally

Expiry weekend choppiness


I was not trading today hence it will be a short update. I was bullish at the start of the day and market did make a new bull market high at 1551.75 in overnight markets. After opening neutral, markets attempted to rally but met resistance near highs and dropped without any pause until 1543. I had overnight position for which I had set stop at overnight session low. That was closed finally at 1546.50 and now I do not have any open position. After hitting the lows of 1541.75, markets were two sided and balanced and closed near VWAP. This is the first time in many days markets have closed red and there is likely to be a follow-up tomorrow and possible test of 1539-36 support zone before it can be determined what directions market are taking for the expiry.

I flattened my stock portfolio. Added F/DFS long and BIDU/RHT/AKAM short and balancing hedge on SPY.


2013-03-11

$ES_F : 1542 - 1552 : Market Recap


Another new high - a slow certain march to all time high.

Trend remains bullish.


Market started the expiration week on front foot. The Clock change in US allowed trading to start and finish 1 hour earlier for me. Enjoyable time until end of the month. Here is 5 minute chart of today's day session.




I came in the day bullish as per this trade plan. Overnight markets were neutral. After opening slightly down on low volume markets immediately dropped to expected support zone and breached it by a tick, giving only one fill (first green arrow). The reaction was strong and hence I did not cover at gap fill. Market continued to keep the pattern of higher highs and higher lows and soon created new bull market high. It seemed to stall there for a while and decided to take profit at 1547 (second red arrow). In hindsight it was early. The comments section of the trade plan describes the trades.

$ES_F : 1542-1552 : Expected Day Session Range for EMINI

Possible attempt at all time high likely.


1535 key support level to watch.


Hope my friends in US are enjoying the clock change and not finding it all confusing. Markets still retain that bullish stance and with no news expected today, I would expect markets to play by the same hymn sheet and grind higher. This week is options expiry week so may be the touch to all time high is likely to happen by Wednesday/Thursday.

Today again I would expect to find support at 1542-39 area and resistance in 1551-53 area. I would be looking to see the reaction in the trading range before taking a trade. Market is looking to end on a bullish note.

In my hypothetical stock portfolio I will be reviewing various stocks from weekly close basis.

The trend is still bullish and calling tops is futile. However please have a look at this post from longer term perspective which is keeping me cautious at these levels. 

2013-03-08

$ES_F : 1541 - 1551 : Market Recap

Employment numbers surprise on the upside.


New high for current bull market. Trend remains bullish.


After a consolidation day yesterday, today was bit different and saw nice two way energy and confirmed the bullish set-up once again. Here is 5 minute chart of today's day session.



I came in the day bullish as per this trade plan. Overnight the markets were bullish and looking to open strong after employment numbers surprised on the positive side.  After opening strongly gap up on good volume, however the market mood changed immediately after first 5 minute of trade and market quickly dropped into expected 1541-1538 support zone and further down. This move down was sharp and sudden and without any rally in between so it seemed like (without the benefit of hindsight) that it could very well be rejection of the day session high. I was filled on all my levels shown by green arrows.With that set-up I came in the "alert" mode and was looking to exit most of my positions near the day session mid and a move to VWAP. I got the first opportunity when the markets traded near the day session mid (fifth red arrow) and I exiting 75% of my position leaving the stops on rest on day session low. At this time a minor short set-up was also in play. However after hesitating a little near the day session mid point and VWAP shown by grey oval, markets broke higher and the minor short set-up was rejected. This allowed me to move stops to my remaining position to break even. Since I bought the position near the day session low, I am planning to keep it overnight with break even stops and manage it as a swing trade. Markets continued to grind higher rest of the day on low volumes and appear to be closing near highs. The comments section of the trade plan describes the trades.

$ES_F : 1541-1551 : Expected Day Session Range for EMINI


June Future is front month today.

Unemployment numbers give new boost to the bulls.


I will be referring to June future from today which became front month yesterday and volumes rolled to that contract. I also had to go for an event last night so there was no market recap but my trades are commented in the trade plan or in the HomeWork page. Unemployment numbers were a positive surprise for the markets and promptly crushed Gold and lifted stocks. I would expect this to be the theme of the day.

Today I would expect to find support at 1541-38 area and resistance in 1549-51 area. I would be looking to see the reaction in the trading range before taking a trade. Market is looking to end on a bullish note.

In my hypothetical stock portfolio I will be reviewing various stocks from weekly close basis (that would be weekend work) and to balance the short position with some new longs at good levels. Recently I added MSFT and TOL and would look to complete those positions if possible.

The trend is still bullish and calling tops is futile. However please have a look at this post from longer term perspective which is keeping me cautious at these levels. 


2013-03-07

$HG_F : Wireless Recovery Without Copper

Dr Copper coiling up in tight range while stocks surge. May be we are all wireless now :-)

Sign of potential disconnect between markets. Time for caution for any bulls going all in on these highs.


I am sure every one is basking in the glory of headlines about stock markets hitting their all time highs (Bah Humbug). The bull market of 2009 is incredible in that regard. It has crushed the bears, many top callers have been obliterated and the markets have come in the complete control of central bankers planning bailouts and engaged in money printing. It is quite likely that in such party, the sentiments can get carried away. After all, who has not heard the famous last words - just one for the road!

Even though I trade technically and what is in the charts, I like to keep an keen eye on fundamentals, eventually fundamentals do come out in charts. One such indicator of economic activity is Copper. If the growth is coming from economic activities, copper is one element which is used in abundance. Any real economic activity (bank bailouts are not real economic activity in case some one has doubts) ends up using copper. So demand and therefore price for copper can be a good indicator of what is happening in real world. In fact for that reason many market participants call it Dr Copper. Here is a 5 year weekly chart of Copper continuous futures compared to SPX (as magenta line).

$ES_F : 1530 - 1542 : Expected Day Session Range for EMINI

Forget bulls and bear. What has gone wrong with lions?

Cautiously Bearish today.

What is wrong with the lions and why are they coming after women? Recently one has managed to spoil the climax for a couple and other has managed to devour an intern. In other news, ECB and BOE left the rates unchanged and BOJ did not do more than what they are already doing. China made some noises on currency wars and dumping the garbage in the neighbours yard with wink and nudges directed at Japan. Markets are looking bit balanced today and may trade in a range and choppy before taking next move. Current tight range of 1536-1544 seems to be holding up the energy of the up move. I have a feeling we can see a peek below this range today to shake out some recent bulls. 

Today I would expect to find support at 1533-30 area and resistance in 1541-1542 area. I would be looking to see the reaction in the trading range before taking a trade. Overall I expect today to be a day of consolidation. May be I will look at various other markets or look for longer term swing opportunities. I will update the comments section as and when a trade set-up is holding.

In my hypothetical stock portfolio I am looking to balance the short position with some new longs at good levels. Recently I added MSFT and TOL and would look to complete those positions if possible.

The riding trend is still bullish and days like yesterday or today are simply consolidation in the a major trend. There is no good short set-up in play so far.



2013-03-06

$ES_F : 1539-1551 : Market Recap


Consolidation day with bullish bias.

Another new high for bull market.


Today was a day of consolidation with markets maintaining their bullish bias. Here is 5 minute chart of today's day session.



I came in the day bullish as per this trade plan. Overnight the markets were bullish and looking to open strong. After opening strongly gap up on good volume, the initial move to gap fill was rejected and I went long at 1543 (first green arrow) thinking that my entries will not be filled. Market proceeded to make a new high but immediately started giving up the gains. I took my second long at 1540.25 (second green arrow) after market missed my support zone of 1439 by 1 tick and I got my final fill at 1438 third green arrow. Market started its slow grind up after this point after hesitating near VWAP for a short while it shot up to close to day session high. I exited my bulk of position at 1544 forth red arrow and the final position at 1439.5 fifth red arrow after markets failed to close near highs. The comments section of the trade plan describe those trades.  Today was a balanced day overall.

$ES_F : 1539-1551 : Expected Day Session Range for EMINI

All time highs are in fashion. SPX heading to its own All Time High


Bulls in control of the market.


Markets have got some new bulls because all headlines are pointing to "Stocks Are King". The trend is firmly bullish but there are ample signs of caution. Markets have been on bullish front foot after DowJones hit its all time high however it is a bit of Bah, Humbug. Death of Hugo Chavez is also a non event for the markets. Who needs to mourn a socialist when DowJones is on all time high however the speed with which Telegraph came out with this obituary it seems they had been writing it whole day waiting for the "publish" button.

Today I would expect 1539-1536 as area of support leading to a move up to 1546-1550.

In my hypothetical stock portfolio I am looking to balance the short position with some new longs at good levels.

2013-03-05

$ES_F : 1527-1538 : Market Recap

DowJones on All Time High. Russell already enjoying. S&P to follow shortly.


Another high, bulls in charge.


DowJones looks to be closing above its All Time High. Every one is excited about that. S&P500 is not far behind and just 33 points below its all time high. After a long time, people have started talking stocks once again. All this reminds me of 2007. The markets are floating on artificial props and with one catalyst the house of cards can start tumbling down. But so far there is no such catalyst in sight and so it seems the trend will continue.The bull market which started in 2009 is powering ahead in full swing. Market has decidedly broken out of the range it was trading before I left for my travel last week. Here is 5 minute chart of today's day session.



I came in the day bullish as per this trade plan. Overnight the markets were very bullish and looking to open strong. After opening strongly gap up on good volume, market immediately went to trade at my expected day session high at 1538. It was getting clear that markets will trade higher than that. I went a probe long first green arrow (small position to test the market with tight stops) and I could manage to exit it new session high was printed shown by second red arrow. I am still getting back into my trading routine so I did not trade much and instead was looking charts and reading twitter and facebook. Markets eventually proceeded to make new high at 1542.75 indicating a strongly bullish market.

$ES_F : 1527-1538 : Expected Day Session Range for EMINI


More pain for bears. $DJI is likely to hit its all time high today.

Bulls in control of the market.


When I was leaving on my travels last week it was looking as if bears are showing their claws again but the joy did not last for more than couple of sessions. The markets have come back to hunt for up-side and crushing any shorts which may exist in its way. Russell 2000 has made all time high, DowJones is going to make it today it seems. The news papers would be full of this in coming days. SPX is not far behind and very likely it will make new highs as well before this tide turns.

I would expect 1527 area as support today leading to a move up to 1538-1540. I am still getting back in the routine of trading after my travel so this is a short post.


In my hypothetical stock portfolio I am looking to cover 50% of AAPL short and move stop to break even.

2013-02-25

$ES_F : 1518-1528 : Market Recap


Round II bulls got on the chin. Bull-1 Bear-1: Consolidation range forming 1495-1525

This is classic topping pattern/consolidation. The bias has again shifted to down side. Breakout from range to give resolution.


Blame the Italian's or Fiscal Cliff Nonsense Part II or growling bears but today was exact opposite of what happened on Friday. You will see from the chart, on Friday my chart had my projected high of the day as 1510 and market trading significantly above it so much so that projected low of the day is not even visible. Today you have my projected low of the day 1518 and market trading well below it. Same pattern, mirror image. But overall this is a good development. From my experience, this flip-flop signal going from bear to bull to bear imply significant pause points for the market and possibly a reversal signal. We now have a well defined range 1495-1525 and breakout from the range will provide a good trade with stop above the range. Volatility has improved and touching 17. Volumes are returning to the market. Somehow it feels it is no longer the one-way slow grind up market any more. Here is 5 minute chart of today's day session.


I came in the day cautiously confused as per this trade plan. Overnight the markets were very bullish and had broken the line in sand for the bears at 1518. It was increasingly looking as if the markets would break 1530 today. After opening strongly on good volume, I went a probe long first green arrow (small position to test the market with tight stops) and I could manage to exit it immediately after day session high was printed second red arrow. I was not expecting for my trade plan orders to be filled but pretty soon market started dropping and filled my orders on a quick reaction (next 4 green arrows). I was expecting a move up to 1514 for gap fill. There were two high volume bars in that area marked with grey oval. This kind of told me that may be I got the low of the day and I can hold my positions. I was expecting a quick move up to VWAP but the markets reaction was not consistent with rejection of the low. After it failed to reach VWAP even after 30 minutes and started stalling near 1516, I decided to sell at minor loss last red arrow.

$ES_F : 1518 - 1528: Expected Day Session Range for EMINI

Oh Dear, Goldilocks is eating the bears. 

The only running measured move short set-up is broken in pre-market. If bulls can hold, we are back in game on upside.


This market's strength is frightening as well as charming. Continuing rally without any meaningful correction is dangerous but if this is what market gives, this is what we need to take. Moody's downgrade for UK's credit rating simply sent the UK markets higher and GBP sharply lower which I guess these days is taken as sign of perpetual prosperity at least for the stock markets. Overnight Japan made noises about bringing in a doveish central bank governor and their markets are up 2% as well. Even the damp news of lower Chinese PMI brought in a mere few points dips in the sentiments. Looks like the party is well under way and carrying on. Bring on the champagnes!

1495 was well defended support area and is now a line in sand for bulls. It appears bulls might make an attempt at all time high for S&P before giving up any of their positions. With that in mind, I would expect support to be found at 1518-1515 area today leading to a move up to 1528-30 (which can also trigger some stops above 1530).

We might have some reactions to political comments related to The fiscal cliff nonsense version II  . Italian election results should be coming towards close and might have an impact on tomorrow's trading. I will update the comments section as the day develops. If you are subscribed by email to comments, you can follow the discussion.

2013-02-22

$ES_F : 1510 - 1490 : Market Recap

In round I bears have been shaken a bit today. Bull-1 Bear-0


Short set-up is not broken but it is not looking great for bears. Caution required on both sides.


Well on the face of it, you will need to give it to bulls. They have defended 1495 clearly and after that, they have broken some intra day short set-ups. The main short set-up for last 2 days drop is still in play but if the performance tomorrow is as good as today, that is not likely to hold for much longer. Volumes were missing today however and only came in the end possibly to squeeze new shorts. Here is 5 minute chart of today's day session.


I came in the day cautiously bearish as per this trade plan. Overnight markets were bullish but were within the main short set-up and I was expecting that once the run up from 1495 is exhausted, we should get new sellers in. Markets opened gap up but was looking vulnerable on highs and I was expecting a gap fill move at least. I went short at first red arrow and there was immediate reaction to down side. However rally started stalling near 1504 making me suspicious. I was trailing mental stops near VWAP and after market broke above it first time, I took exit at second green arrow. From hindsight it looks bit early but I was cautious today. Market proceeded to make a new low at 1503.25 but I was expecting lower level, at least 1501-1500 so I did not go long. In hindsight, it was a mistake as there were signals that market has changed control to bulls.

$ES_F : 1510-1490 : Expected Day Session Range for EMINI


Cautiously bearish. Two competing set-up in play. 1500 is key area. Bullish above, bearish below.

Today is day of struggle between new shorts v/s new longs


After 2 days of drops, markets are enjoying a rally in pre-market. However the current ongoing set-up is a short set-up. 1495-1490 were intermediate term support zone for longs. In that light, today is a difficult day to call, specially given it is last day of week and close below 1508.5 would turn the weekly trend down. At the same time close above 1517 will make it 8th consecutive green week. As can be imagined each side has something to offer in this struggle and can be cause of all the choppiness we might witness today. The last 2 days drop has done some shake up in recent bulls and possibly brought in some new bears. Now one side will have to prove they have muscle. All in all it is possibly a day of caution and mainly watching for set-up confirmation.

The reaction started from overbought territory which still remains the case. The fiscal cliff nonsense version II has started by various sides starting to make noises. Italy is going through election during weekend and that can bring some caution. I had been cautious on the highs, mainly trading on day trade basis only. I am also equally cautious here and not going short all the way in. Remember, so far only the long set-ups are broken. We need need a short set-up to hold. However tempting it looks, we need a confirmation for big short positions. So far I have two set-ups. 1500-1515 or 1510-1490. The key is to watch the reaction in 1500 area. At the same time 1518 remain key level for shorts. I will update the comments section as the day develops.

2013-02-21

$ES_F : 1495 - 1509 : Market Recap


Bears have confirmed the trend change.

2 Days have erased 2.5 weeks of gains. These were the reasons to be cautious on bullish side.


Finally and after a long wait, bears have managed to control the market for two full sessions in a row and in the process erased all gains from 4th Feb 2013 in just 2 days. The markets were vulnerable to this correction for a long time and even for a longer term bullish case, such a correction was needed to shake out weak hands. Now the question which every one must be asking - is this the end of the bull market since 2003 or is this just a correction. And the the answer my friend is blowing in the winds. Just like bull markets require confirmations and consolidation, bear markets require periods of confirmation and congestions. The markets are a constant battle between bulls and bears and only pigs get slaughtered. Here is 5 minute chart of today's day session.


I came in the day cautiously bullish as per this trade plan. Overnight markets were bearish and still digesting the fed news driven drop. Market was susceptible to shaking out recent buyers. Markets opened gap down and weak and continued to drop but without clear energy on down side. Mainly it was dancing around the VWAP indicating a tug of war. Eventually markets traded to the expected low of the day 1495 to the tick and immediately started going up, providing some short term intra day long opportunity to take profits at VWAP (Green and Red arrow). Since this was counter trend trade, quick profit were warranted though market continued to move higher after that. Market still failed to touch day session high and eventually rolled to end near VWAP - indicating people are still selling rallies.

$ES_F : 1509-1495 : Expected Day Session Range for EMINI


First sign of bear claws. Fed spoils the party.

A clear bearish reversals sets up a short set-up. Now time for follow through.


I was late yesterday so did not have time for a blog post but what a day. Fed came and spoiled the party by "hinting" no more free money and market traded to levels last seen on 7th Feb wiping nearly 2 weeks of gains. Well that, my dear friends, is the power of bears, the ride up is grinding but crash is quick. That is one reason I love to trade bear markets.

The markets were in key overbought territory and this is first sign of a correction. Please do not mistake it for a signal to outright short. I had been cautious on the highs, mainly trading on day trade basis only. I am also equally cautious here and not going short all the way in. Remember, so far only the long set-ups are broken. We need need a short set-up to hold. However tempting it looks, we need a confirmation for big short positions. Key levels for me to watch are 1488-1470 area for support in medium term. So far the feel from yesterday's correction was similar to 4th Feb 2013. Then the markets quickly reversed next day and made new high. We need to be watchful of that pattern repeating. Since 1510-1522 range is broken (first on upside as fake out and then on downside with good volume), that should act as resistance. Today I would expect resistance in 1509-1512 area. I will update the comments section as the day develops.

2013-02-19

$ES_F : 1516-1525 : Market Recap

Another New High 1528.75.

Bullish set-up continues.


Markets made a strong start after holiday and right from open. Even Obama speaking caused only couple of points drop. Looks like this market has discounted every bearish indicator. Here is the 5 min day session chart for E-Mini.



I came in the day cautiously bullish as per this trade plan. Overnight markets were bullish and acting in line with long set-up. Markets opened strongly and did not fill gap and kept moving higher from open on good volume. It was clear stops above 1422 were triggered evident from on high volume and soon NYSE TICK registered high tick along with then high of the market at 1424.75. Usually such activity typically creates a small pull back and I was expecting the gap to be filled along with drop to expected support level. Once market started stalling near the highs, I took a cautious short (first red arrow) towards support via this comment. Market gave me first warning that I was wrong by making new high at 1425. Eventually market dropped below VWAP but found support and I exited this position at second green arrow as mentioned here. Market eventually made new highs at 1528.75 and has been trading above day session mid, indicating a strong bullish set-up. Even the customary gravitation to VWAP did not happen in the day session.

$ES_F : 1516-1525 : Expected Day Session Range for EMINI


Cautiously bullish on this volume less trade.

Market is still in the grip of bulls even though volumes are plunging and bearish divergences emerging. 


Hope my friends in US had a happy and relaxed extended weekend. Things have not changed much on this side of the pond. Some well planned crooks managed to steal a huge haul of diamonds from Brussels airport. With all the drama our governments do at airports in the name of security, these incidents show that a determined person would not necessarily take the route via the metal detectors and frisky hands of security personnel. In other news Paris police are weighing up to spend 1 million to determine a criminal or let the matter go in the name of austerity. HLF should be active overnight once again when the company, stuck in the ego of major wall street big shots, announces earnings. This was an important lesson in reacting to news for traders. Once 13D was announced, there was a panic in the overnight market, expecting a short squeeze and massacre, all of which turned out a damp squib. A patient trader would work on targets and bank some money. It would be interesting how far Icahn (I am always tempted to write his name as iCahn for some strange reason) would push this saga.

Coming back to our S&P it seems clear that not much has changed. Overnight the markets looked slightly bullish with no major movement. The market is still within 1510-1522 trading range, and still trading within previous day range. Possible expected break out from this range is on the up-side. On economic announcement front there is not much action today. Today I would expect support in 1516-1514 area. I will update the comments section as the day develops.

2013-02-15

$ES_F : 1515-1525 : Market Recap

Choppy Pre Holiday session


Market in no-men's land. 


All fireworks I was expecting from HLF turned out to be damp squib. It would seem Icahn should focus on Ackman instead of opening his mouth on TV - that act alone shaved some 3$ from the share price and as I write this post HLF is close to yesterday's close giving up nearly 10$ of over night market gains. I am glad I took advantage of the after hour trading madness to exit at 46 and to get into a risk free trade. The close shave with meteor also did not produce any fireworks. And even though our market made violent moves today downwards, it is still stuck neither here nor there. Looks like S&P will paint another green week close - 7th in a row. Here is the 5 min day session chart for E-Mini.


I came in the day cautiously bullish as per this trade plan. Overnight markets were bullish and acting in line with long set-up however due to option expiration I was expecting a choppy day. Markets opened strongly and after gap fill, kept moving higher on high volume and mainly traded around the VWAP for most of the early part of the day. I was beginning think I will not get entry to my anticipated support zone. After making high of the day at 1521.75, there was reaction to the down side near European close. Market traded just a tick above 1515 expected low of the day and I got just one fill at 1516 in my 1516-14 support zone marked by first arrow. So far the things were according to plan but I was suspicious of the reaction from the support zone mentioned in this comment.

$ES_F : 1515-1525: Expected Day Session Range for EMINI


Cautiously bullish on this volume less holiday weekend trade.

Options Expiry today expecting choppy day.


It is a Friday and it seems there is so much agenda for the day and weekend. At 19:25 GMT we are going to get the closest visit from a heavenly body of the size of a swimming pool, I do hope it does not come too close or I would not have time to write up the Market Recap :-). Before that in preparation another not so friendly visitor shattered some windows and injured on-lookers in Russian Ural mountains. It appears the heavens are making up for the excitement lacking in the volume less slowly grinding markets. Overnight Icahn beat up Ackman with a 13D disclosure that he is going to steal the lunch money from a playground cry baby and that shot HLF up to crazy heights in after hours trade. This well orchestrated short squeeze is going to be painful as nearly 34 mln shares - a good part of free float - are short. The problem would be if the stock lenders start calling in loaned stock in light of possible tender offer - a threat Icahn made explicitly and Ackman dared him on. Any one remember what happened at VW in Europe when Porsche announced similar stake and accompanied short squeeze?

Coming back to our boring S&P500 on options expiry day ahead of holiday weekend, it seems clear that not much is going to happen today. Overnight the markets looked direction less, trading within previous day range. On economic announcement front there is not much action today. Today I would expect support in 1516-1514 area. I will update the comments section as the day develops.

2013-02-14

$ES_F : 1507-1517 : Market Recap


Oh Dear! Will it Ever End

Good attempt by short but no follow through


Whatever happens in the world, this market seems to be discounting it all. This is sign of tremendous strength of the bullish sentiment. Volumes are missing from these markets so a warning sign BUT so far there is no sign of chink in the armour of bulls. Today started with an overload of bad news on GDP front but these all all bad news of economy is good news of stock market because the participants expect more money printing and more bailouts. Here is the 5 min day session chart for E-Mini.


I came in the day cautiously bearish as per this trade plan. Overnight markets were weak and completed a full short set-up (albeit on small time frame). The news from Europe was not great. Coupled with the flirting with resistance levels, it seemed may be just may be bears will have time to show their claws this time. Markets opened gap down and immediately made low of the day at 1510.75 with high volume and lowest tick reading for the day. This is first arrow on the chart. That it self was a sign of "worry" for bears but it is easier to say that in hind sight. May be a a lesson for future.

$ES_F : 1517-1507 : Expected Day Session Range for EMINI

Overnight short set-up played in full.


Today is first day for shorts to follow through.


Looks like the market darling is not happy on this Valentine day. Japan remain mired in recession. Even in Eurozone French and German economies contracted. Currency War is on and everyone is trying to talk their currencies down. And eventually ES made overnight low of 1510 confirming one full run of the short set-up I had pointed out in my last night's market recap. Now it is follow through time. If the shorts can keep this market below 1519 and close near lows of 1507, we can possibly have first confirmed short set-up. Hence I am cautiously bearish today. Today I would expect resistance in 1517-1519 area. I will update the comments section as the day develops.

I have meanwhile start establishing my hypothetical stock portfolio. Please comment and discuss your views and suggest any additions there. I have added CSCO recently on long side. I am looking at some other positions to create a balanced portfolio.

2013-02-13

$ES_F : 1515-1522 : Market Recap

1522 New High. Small Short Set-up in play.


ES at key resistance point. Rally target from 1266 met.


It has become a familiar one way street this trading lately. Markets open, dip a bit, grind higher all day and establish a new high in a dull narrow range trading day. Well today was slightly different. The volume was generally low but still there was a burst of activity at key points indicating something bigger at play. May be longs taking profit, may be trend is changing. So far no confirmation but there is a warning flag.

I came in the day bullish as per this trade plan. Overnight markets were pointing higher and made new high at 1520. After opening with small gap up, the resulting dip was did not fill gap and instead made a low at 1517.25 and markets quickly made to the expected day session high at 1522 without any fills on long side. I was not prepared to fade the 1522 level on short side without a confirmed short set-up so mainly I ended up twiddling thumbs. However the rally started failing at 1522 and by mid day, markets dropped quickly to 1514.75 giving long positions in expected support zone. Now if the trade were to act as per script, I was expecting a slow grind follow through on the upside like a typical day. Indeed that was the case and markets visited the VWAP at 1518 allowing stops to be moved to break even and 50% profit opportunity. However at this point I noted a failure/stall in the rally and I exited remaining positions at 1517, noting a trend change which I mentioned in this comment.

$ES_F : 1515-1522 : Expected Day Session Range for EMINI



Bullish set-up continues via Dull Trading

Resistance is futile. We are all assimilated now. 1520 target met overnight. 1540 in sight.


I was not well yesterday but looks like I have not missed much. Markets continued to head higher, make new highs and trade in low volume, narrow range grind up. Typical of a bull market. There have been enough noises on currency wars but not to a great outcome. Looks like world is chugging along. Tomorrow being Valentine Day, it seems difficult market will break anyone's heart. I have meanwhile start establishing my hypothetical stock portfolio. Please comment and discuss your views and suggest any additions there.

Today I would expect 1515-1512 as initial area of support. I will update the comments section as the day develops.

2013-02-11

$ES_F : 1520-1512 : Market Recap


Shock! Horror! $DJI once again closed below 14,000

1517 new high in overnight. Otherwise a dull day.


During my recent visit to HK, I noted a clear change in our customer sentiments. Considering I travelled a long distance, typical meeting opener is "how are things here". Traditionally the Asian customers are very bullish. They would be boasting their business success. They would talk about their plans for coming days, weeks, years. This time it was bit subtle. All is well but ... In most conversations there was but. Business is good but we are on hiring freeze, or worse cutting down - down sizing as they call it euphemistically. We are doing good but we are not investing - the focus is on bottom line. Need to meet the numbers. Somehow it feels that all is not so well under the surface.

Anyway, I came in the day bullish as per this trade plan. Overnight markets were pointing higher and made new high at 1517. I was expecting the 1520 target to be met today. But markets had a tired note from open and pushed lower from open. Volume was good and VIX got crushed below 13 handle again. After opening close to unchanged, market quickly dropped into the 1512-1508 support area giving entries for long. The subsequent rally was not strong, 24 hour session midpoint 1513.5 provided opportunity to close 50% of positions, the remaining were left with Low of Day stop. However the failure to make any strong move up was warning that rally is fading so I could manage to close positions on mental stops/intra day set-ups. There was another attempt to rally near close but that too appears to be fizzled out.

$ES_F : 1520-1512 : Expected Day Session Range for EMINI


Bull on full power.

Resistance is futile. We are all assimilated now.



I was away last week in HK, as evident from the silence on trading front and more on Jogging and Fun related posts. When I was leaving HK, China was getting ready to start Chinese New Year preparations. So first and foremost - Gong Xi Fa Chai. May the Snake bring all the good fortune and joy in the coming year to you and your family.

恭禧發財

As so happened, the mighty Chinese juggernaut kept chugging along and overtaken US for the first time as biggest trading nation. I think the time will be near when I will actually be trading on Shanghai Mercantile Exchange instead of CME but until then, let us see what our markets have been up to.

The bullish story continued unabated through out last week with just one minor wobble from a European sneeze and it would seem ES is expected to reach its 1520 target now and possibly extend it. The next upside target is 1540 area and then all time high.
  
Today I would expect 1512-1508 as initial area of support. I will update the comments section as the day develops.

Jogging at Bowen Road HK.

Something new to do in Hong Kong

Hidden gem in Hong Kong


Central Hong Kong is a congested city with narrow footpaths and roads filled with cars. Not a place for jogging given uneven surfaces and pollution. But hidden in City's heart are some places which will take you away from the hustle and bustle of the city and rekindle your energy levels. I have been to HK several times but most of the times my idea of fun has been to spend a crazy night in LKF and get up next morning with a headache only to find that hotel breakfast is served until 10:00 and it is nearly lunch time. Well this trip was different. Lately I have taken up running long distances at leisurely pace (jogging at 10-15 minute per mile) and like a tiger looking to mark its territory I have also taken up the desire to run in each new place I go. This also ends up being the best way to know a city and its residents.

This post is about my latest jog at Bowen Road in Hong Kong. Close to Central with 8-10 miles run engulfed in nature enjoying great views over the Central and Wan Chai area from a vista point you can barely imagine in Hong Kong.

My Hypothetical Stocks Portfolio

Tracking performance of my views on various popular stocks.


I do not trade stock in general and instead I prefer bigger markets like S&P 500 index future, Treasury Bonds futures or foreign exchange which suits better to my macro driven approach to trading. However it is no secret that majority of investing and trading population discusses, trades and loves to talk about stocks. Some stocks tend to build up enough following so as to behave like a macro indicator for general market. My interest in trading stocks began after I started following and shorting AAPL. More than the trade I enjoyed the resulting discussions with my friends and colleagues in investment and trading circle. Hence I thought about creating a collection of my current views on various stocks and also keep a track of those views. Just for a light hearted investment track record.

Please provide your comments and discussions. Also if you wish you discuss a particular stock please mention in the comments and who knows, I might take a hypothetical position in that :-)

My Hypothetical Stock Portfolio Table

2013-02-03

Super Bowl and S&P $SPY

Sitting at the airport after a cancelled flight here is an interesting statistics for super bowl to munch as food for thought. h/t to FT financial times .The only business news paper I care to read and trust.

Last 2 times S&P was above 1500, next year after Super Bowl it fell by a combined total of both team's score. Going by this massive correlation :-) it would seem the American investors and possibly word would hope and pray for the best outcome of 0-0 tie. For entertainment watch Beyonce who is claimed to be well rehearsed and won't do a Milli Vanilli this time.

2013-02-01

$ES_F : 1496-1506 : Market Recap

Longs still in charge. DOW 14000 headline coming in print tomorrow every where.


1510.5 new high. No end in sight for the rally. Expect 1520-1528.


I came in the day undecided as per this trade plan. Yesterday markets failed to close lower enough indicating the underlying strength of the long side and today morning the only prevailing short set-up was under attack again and was decidedly broken in pre-market after NPF numbers which came a little below expectation but markets ignored the news. It would seem any bad news for the economy is good news for markets because they would expect fed to continue pouring money. Volume also improve a bit and VIX got crushed again after reclaiming 14 handle it is now back showing 12 handle and hovering just above new lows. Market opened bullish and the with a wide gap which was not expected to be filled. They traded no where near my expected 1496-94 area, not even 1498 where I would have taken a small probe long. After trading at 1500 markets headed higher without looking back after ISM news put the rocket under the market. I was expecting high of day at 1507.50 via this comment but eventually that too was overtaken.

$ES_F : 1496-1506 Expected Day Session Range for EMINI

Undecided. Will SPX end the rally or end the 5th consecutive week in green.


No rush picking tops but caution required on long side.


Markets ended the month end in the choppy area as I pointed in this post. For the short set-up to be active, the markets should have closed bit lower. Overall SPX ended the month on bullish note and optimistic start of new year. As of today, two competing set-ups are in play. Short from 1500 is still not broken in day session and measured move long from 1496-94 is also in play. Target area of 1520 and unployment/NFP numbers are broadly in line but unemployment rate ticked up slightly. So far SPX has reacted in bullish fashion.

I am undecided today in terms of trading. Today I would expect 1496-94 as initial area of support. I will update the comments section as the day develops. Factors affecting the rally are:

2013-01-31

$ES_F : 1498-88 : Market Recap


Finally a pause in the rally.

Short set-up holding but barely Showing strength of this rally.


I came in the day bearish as per this trade plan. After a lower settle yesterday the markets were trading decidedly lower in the overnight sessions and the set-up before open was looking bearish. Volume was on a bit better but still sluggish, I would have expected a lot more given the month end activity. May be it will pick up near the close. VIX is now above 14 handle however the market reaction is bit muted to that. Market opened and headed to gap fill which gave short entry in the anticipated resistance area of 1498-1500 eventually making a high of 1500. Subsequent break confirmed that the short set-up is holding allowing 50% profit to be taken and stops moved to then high of day 1500 as mentioned in this comment.

$ES_F : 1498-1486 : Expected Day Session Range for EMINI


Month End Window Dressing Day

1520 still in sight but short set-up in play.


It seems like ages but it appears that short set-up in play yesterday worked to its target and if there is any fire power with bears, they might try to push this overbought market a little bit more. GDP numbers were a surprise to the market. Target area of 1520 is in sight now it would seem after a strong run markets might look for a brief pause. Today is month end so once again lot of choppy trades to window dress the first month performance.

Today I would expect 1498-1500 as initial area of resistance. I will update the comments section as the day develops. Factors affecting the rally are:

2013-01-30

$ES_F : 1495-1505 : Market Recap

Another new high 1506


No significant reaction to FOMC


I came in the day bearish as per this trade plan. In the overnight sessions markets made a new high at 1506 and the set-up before open was looking bearish. Volume was on low side again with only a few bars trading more than 40,000 contracts. This exaggerated the choppiness. VIX rose and claimed 14 handle (without much reaction to the market). However after a long time the markets are likely to close near the low of the day (there is still 1 hr to close so things can change). If this remains the case, it can produce another bearish day tomorrow. Market opened and headed to gap fill which gave short entry in the anticipated resistance area of 1493-95 eventually making a high of 1495.50. Subsequent break confirmed that the short set-up is holding allowing 50% profit to be taken and stops moved to then high of day 1495.50 as mentioned in this comment. Since short side is still counter trend, taking early profits on 50% of position makes sense.

$ES_F : 1495-1505 : Expected Day Session Range for EMINI


FED DAY CHOPPY TRADING BEFORE FOMC

1520 still in sight but cautiously bearish for initial part of the day.


Market has been on a tear and made a new high at 1506 in overnight session. However the GDP numbers just came out and which were much lower then expected and these are likely to fuel a short set-up before FOMC announcement which is due at 14:15 ET. Any signal from FOMC on withdrawing liquidity will be bad news for this market on steroid but knowing Bernie it is very unlikely. Target area of 1520 is in sight now. There is no short set-up in play as we speak but if the GDP numbers weigh on the market we can have a minor short in play before FOMC.

Today I would expect 1503-05 as initial area of resistance. I will update the comments section as the day develops. Factors affecting the rally are:

$YHOO : What is hot about $YHOO

Beside a hot CEO, what is exciting about this stock

Potentially heading to 17-11 or even $5?

Disclosure : Initiated shorts after earnings. Adding on confirmation. Stops above the $21.5 highs.

YHOO has had a good run up for nearly 6 months after breaching $16 barrier. May be it is to do with the new CEO and also the related spring clean of the company. And in the 6 months she seems to have put a fire under the stock presiding over two quarters of earnings which seems to have been appreciated by the street and investors alike. But is this relic of bygone internet boom still worth all these attention?

2013-01-29

$ES_F : 1486-1496 : Market Recap


Another new high 1503

No short set-up holding once again!


I came in the day bearish as per this trade plan. Markets still appear to be in the grip of the bulls and every short set-up is defeated even before it reaches it confirmation point. After stalling last session, markets had a bearish bias in overnight trading and 1491 area was was tested. Volume was on low side again. VIX spot dropped near 13.1 area. Market opened on bullish bias and headed to gap fill which gave short entry in the anticipated resistance area of 1495-97 eventually making a high of 1498. Subsequent break "almost" confirmed that the short set-up is holding allowing 50% profit to be taken and stops moved to then high of day 1498 as mentioned in this comment. Since short side is still counter trend, taking early profits on 50% of position makes sense.

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$ES_F : 1486-1496 : Expected Day Session Range for EMINI

Possible time for pause and cosolidation. Cautiously Bearish


1520 still in sight after consolidation.


After 8 consecutive green days, SPX finally had a pause and  it would appear a short set-up is play. The rally has been over-extending so there is a good chance that this short set-up will play for 15-20 points drop from the high which brings 1485-80 area which also happen to coincide with key support. Target area of 1520 is in sight now. For trend to change we need to have one established short set-up to run for at least a day and then produce a follow through.

Today I would expect 1495-97 as initial area of resistance. I will update the comments section as the day develops. Factors affecting the rally are:

2013-01-28

$ES_F : 1494-1504 : Market Recap


Another new high, 9th in a row.

Short set-up still not visible.


I came in the day bullish as per this trade plan. Even after 8 consecutive green days, there does not appear to be any pause in the bullish momentum. Markets established and new high at 1500 in overnight session and shortly after open traded close to it at 1499.50. Target 1 of 1500-1520 target area has been met and second target does not look too far which will complete the rally target from 1263 area. Volume was once again very low showing a fatigue. There was a not a single 40,000 contract volume bar in 5 min bar chart so far. VIX spot rose again slightly and is knocking on 14 handle. 3m spread flattened sharply to 2.28. These contradictory signals show that markets are on a cross road and even if the undercurrent is bullish, a minor correction is nearby. Market had a slight bearish bias right from open and it traded comfortably in 1494-92 support zone and eventually trading at low of the day 1491.25. Subsequent rally confirmed the long set-up allowing stops to be moved to break even quickly which I mentioned in this comment.

$ES_F : 1494-1504 : Expected day session range for EMINI



Market with extending rally.

Bullish until trend change. 1500-1520 in sight.


SPX has 8 consecutive green sessions so far even after bad news on from AAPL. This is showing the euphoria and strength of this bull market. On a quick look I could not find such pattern before on chart but I will have a look later on. The rally is over-extending but we there is not yet a short set-up in play yet. If this is what markets want, this is what they will get.  The next target area of 1500-1520 is in sight now. For trend to change we need to have one established short set-up to run for at least a day.

Today I would expect 1492-94 as initial area of support. I will update the comments section as the day develops. Factors affecting the rally are:

2013-01-27

How do you trade? $$

General note on how I trade.

And place to discuss your own trade approaches.


A short discussion note to explain my trade plans and also to know bit more about yours. 


What I trade?

I am only trading emini S&P 500 futures these days. Once I get bit more time on my hand I would like to analyse and trade some popular stocks and other liquid futures and forex. I do look at all major markets once a week for longer term trade perspectives or to plan some swing trades. I only trade US markets as the timings suits my work routine. 

What time frame?

My usual style is to trade positions for longer period/swing trade if I can identify a trend and can position myself to ride it. For day trades, I only plan and trade the regular trading session for e-mini S&P 500. The overnight session acts as a good guide to what is going to happen in the day session. Remember trading is always about finding the right zone. I start and publish my day trading plan for e-mini around 0730-0800 CET before the futures pits open for trading. Most of the pre-open news like employment numbers, other important announcements are already out by this time and you get a feel of how futures are reacting. Here is how I plan my trading day  


2013-01-25

$ES_F : 1490-1504 : Market Recap


Still bullish. Market on steroid.

Another day another new high.


I came in the day bullish as per this trade plan. The overnight short set-up I mentioned yesterday and which I was expecting to play out today did not hold and once again shorts were defeated even before the day session began. Markets established another new high at 1498.75 and we are just few points away from 1500-1520 target area for the longest running long set-up for the rally which started in June 2012 from 1263 area. What a marvellous bullish marker! Volume was reasonable today. VIX spot rose slightly and so far did not make new low. 3 m spread is flattening slightly to 2.74. Market had a slight bearish bias right from open and it traded comfortably in 1490-92 support zone which was identified as minor support. However after rallying from low of the day 1490.75, I misread the market when it stalled around 1494 area.