$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:

$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?

$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:

$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:

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  

$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.

$AAPL : What are you doing with your $AAPL holding

With the stock down 35% from top what are "real people" doing?

Buy, Hold, Sell, Short?

It is no secret yesterday's price down in AAPL was dramatic. Very high volume traded and the stock dropped nearly $63, largest absolute drop (in % terms there have been bigger drops in past) in a single day. Market cap equivalent to many NFLX, RIMM, even some countries GDP was wiped out.

But so far, it seems the pain is felt by over leveraged, momentum chasers, hedge funds type OR computers churning stock from one register to another. I am interested in knowing what are real people doing? People like you and me. 

I am sure you would have stories to say. When you bought AAPL? What was the lowest price you paid? Are you still holding that?

$ES_F : 1490-1504 : Expected day session range for EMINI

Long set-up still in play. 

Bullish until trend change. 1500-1520 in sight.

Markets seems to have digested AAPL disappointment really well and seems to be on steroids to make new highs. Last 5 sessions made a new high each session without breaching low of previous day significantly. This is overextending the rally a bit but what can one do. If this is what markets want, this is what they will get.  The next target area of 1500-1520 is in sight now however the markets are looking overbought and ripe for a pull-back or correction which is likely to end in 1480 area. The short set-up which was in play overnight has not worked

Today I would expect 1490-92 as initial area of support. I will update the comments section as the day develops. Factors affecting the rally are:

$ES_F : 1480-1490 : Market Recap

Bullish theme continues. However a possible sign of rejection of highs.

Markets established a new high on good volume.

I came in the day bullish as per this trade plan, but given AAPL's disastrous earnings overnight with stock printing 10% down in pre market, I was expecting a deeper pull back before the next move up. Volume was better today and AAPL was very active. The good news is that even with AAPL down so much the markets managed to retain the bullish tone which is very significant for long side. The bad news is that two minor long set-ups are broken on the way down from 1497.75 high which could mean shorts have a chance to prove their strength tomorrow.  VIX spot shot up today by 1 full point before collapsing back again - in fact they halted VIX trading (something I need to check up in news) - this move added to the weakness. 3 m spread is flattening slightly to 2.95. Market had a bullish bias right from open and without any significant dip, and certainly far away from the support area I was expecting, they shot up and went far beyond the expected high of the day stopping only at 1497.75. This made clear that my analysis was out of line and I decided to make it a "no trade" day via this comment.