The futures are up slightly in pre-market trading on a lot of little yipping bits (a yip is not quite as big as a yap, in case you were wondering.....) which are floating in here and there from Saudi Arabia to New York City. As usual, LEH is at the center of the news.....
I'm not going to get into all the little news bites. Suffice it to say that the market may pop a little out of the gate. I will be looking to scale in to some SPY puts sometime early in the day, but I'll be nibbling at first.
7:35 am MT: I picked up little nibbler put positions on SPY and DIA. I was able to get both positions cheaper than my sell price on Friday. I'm hoping the market pops up a little more in the next hour or two, so I can continue scaling in a little.
7:45 am MT: I scaled in to calls on GG and AEM. I also scaled in to puts on JNJ, UPS, MS, and GS.
7:55 am MT: I picked up a few more puts on the SPY and DIA positions. I'm set the way I want to be now, so I'll sit tight and watch how this plays out for the next couple of hours.
9:30 am MT: I nibbled in a few calls on ECA and SU because I want some exposure to Energy stocks. The market may churn for the next few hours. The SPX is not acting like it wants to dump down to 1,350 just yet, and traders look a little indecisive this morning.
9:40 am MT: The SPX is acting nice and soft on the 60m charts. This is an unusual pattern, but it's a variation of a Bear Flag, which looks like it's going to roll down sooner than I thought. We shall see.....
11:10 am MT: I sold part of the GS puts as the stock got close to minor support at 167 - 168. I have realized a 1.81 profit, or 20% so far (for about 90 minutes).
11:15 am MT: This is probably our tipping point on the morning. The market may be starting to dump a little, we shall see.....
11:30 am MT: I entered a shorter intra-day swing on some GS puts on a separate trade about 11:00 am, and sold them for a quick .62 cent profit, or 6% gain in 30 minutes.
12:00 pm MT: I locked a little more of the GS puts down. The total trade is now a 2.13 profit, or 23% gain so far. I'm going to sit on the last half of the trade and target 162.
12:20 pm MT: I started scaling out of MS puts for a .55 cent profit, or 16% gain so far intra-day. I also started scaling out of the DIA puts. The DIA put is a .64 profit, or 15% gain so far intra-day.
1:15 pm MT: I sold all the rest of the DIA, SPY, MS, and GS puts. Here are the final numbers: For the DIA puts I made a .52 cent profit, or 12% gain on an intra-day swing. For the SPY puts I made an .84 cent profit, or 15% gain on an intra-day swing. For the MS puts I made a .63 cent profit, or 18% gain on an intra-day swing. And for the GS puts I made a 2.84 profit, or 31% gain on an intra-day swing.
Since I got out of the trades the market has bounced pretty good, nothing spectacular, but enough to wipe out part of my profits if I had stayed in. Remember, part of smelling momo is not just about getting in, it's also about getting out. And our market conditions dictate getting out sooner rather than later. If I see some nice setups show up tomorrow, I might lather-rinse-repeat on the same positions. But I think that there are too many twitchy traders out there right now, and when the market is acting like it could pick up a grain of rice with its derriere cheeks, then I lock and walk.
1:50 pm MT: I picked up some calls on AA, which is confirming a bounce.
3:00 pm MT: Market Wrap: The SPX and the Dow popped and dropped, and the Naz underperformed all day. I'm not going to give you all the "elevator analysis" reasons for why. Suffice it to say that Financials were weak (what a surprise), and Energy & Commodities were strong (another shocker). The pop and drop that I was looking for played out very nicely today, a very good day for trading.
Now, don't be fooled by all the barking out there.....the bounce at the end of the day today was all about the Naz, through and through, and to the bone. It was a technical bounce. The Naz has a key horizontal support at 2,429 - 2,430, which I noted for you on the Saturday post. In addition, the 50-Day Moving Average (a key moving average) for the Naz, which is an IT diagonal support, is at 2,429.70. The low on the Naz before it pinged back up late in the day was 2,429.30. You can't draw it up any more precisely than that. So the 50dma on the Naz now is a key tipping point. If the Naz holds, then it will probably bounce, and if it fails, the market will probably continue to sell off. We may get an "oversold" bounce in Financials and Retail, along with a continuation in Energy and Commodities. But the Naz was the driver on the bounce today.
All in all, it was a good day for the papermoney account. I tacked on more than $3,600 in profit to the overall year to date profit, or a 5.5% gain for a day's work.
Subscribe to:
Post Comments (Atom)
UNP has bounced off its lower channel line this morning and may be good for a call
ReplyDeleteUNP fighting at the middle of Friday's large candle (R1).
ReplyDeleteKen: UNP is still in the middle of the ST consolidation, so if you're speculating here, speculate small at first.
ReplyDeleteDwight, you used the word "dump" regarding the indexes. Are thinking about taking profits on any calls if there is another swift selloff?
ReplyDeleteBob: I only have calls on stocks that will probably hold up on the (probable) last leg down in the short term downsing of the markets. In addition, I only have half-sized positions on any calls, so I'm Cherry Picking for a bounce in those areas the next couple of days.
ReplyDeleteGood morning Dwight. Hope you had a good weekend.
ReplyDeleteIs there a way to chart oil on the prophet charts or even trade oil straight up besides the uso?
I bought a small position and I have sold it for a small profit. UNP is tracking the SPX more than it should for a call today!
ReplyDeleteDwight, if you buy based on the 15 minute charts would you set your stops on the 15 minutes or do you stop out on the hourly or daily's? Or do you simply use your crystal ball?
ReplyDeleteI have been getting good entries on the 15 minutes but i am getting stopped out using them as well and it seems to be a breakeven on average so far.
Last but not least it seems I have lower odds when I buy in the 1st 15or 20 minutes. Should I wait for a little more interday confirmation until maybe I am better at it, or should you always wait at least a little while after the open for some real direction to get in?
Steve: look at the left hand menu in Prophet. Click on Futures, then Energy, then July, then Crude Oil.
ReplyDeletealso: I stop on my base time frame, which is usually, but not always the daily charts. I use the smaller time frames to finesse entries and exits. As for time of day, you can see that any time is open season to me, as long as I see the price action to signal the probability of the move
Mee seems to look good bouncing off fridays gap at 73.25.
ReplyDeleteHi Everyone
ReplyDeleteCould anyone comment and explain the candlestick formation on OIH - i would really appreciate any comments
Thanks! trying to figure out oil
AA breaking 41.63 resistance
ReplyDeleteClaudia: The OIH is fighting off a Dark Cloud Cover from Friday, which is bullish so far.
ReplyDeleteJustin: nice job keeping an eye on AA. I picked up some when the stock was at 42, and I'll pick up more if it floats back to 41.50 tomorrow.
Getting the hang of it, did 2 interday trades on mee, up 10% on the 1st one and 12% on the second. A couple other interdays, on tex made 12%, igt bought to early got stopped out lost 5%, and ms same thing, lost 8%, and last made 5% on vlo.
ReplyDeleteHi Dwight
ReplyDeleteA good day in the market indeed. I followed your lead on the SPY and DIA puts and I made some money. I did not get out on the first bounce, but did on the second for some profit. bear bounces sure are fast on the upswing! Does higher low for SPY on the 15 minute chart have signifigance?
Dwight, I followed your advice on my SPY puts. Entered this morning, sold half for a 10% gain, but then decided to close the other half when I saw the SPX was not going to make it down to 1350 for an overall gain of 12% in half a day.
ReplyDeleteSteve, Ken, and Christina: nice job with your trading today. Ken and Christina, good work on the SPY puts. Lock and walk sooner rather than later in this market environment. Great trading all the way around. Ken see my market wrap for details on what was most significant as a bouncer today.
ReplyDeleteHi Dwight,
ReplyDeleteI just read your Sat. post. and am very happy to hear about you plans. I must say, learning from a true trader is the way to go. Keep it up !!!
Gang,
ReplyDeleteI can't believe I missed AA. I was stopped out twice trying to cherry pick that one last week.
I had profitable day thanks to Dwight on the DIA and SPY puts.
DIA - 10%
SPY - 16%
RTN - 30%
NE - 6%
ESV - 32%
I am only holding a few contracts on NE and ESV. I lost some profits at the end of the day trying to see if DIA and SPY would run some more.
I would like to piggie back on Steve's question about chart times. Based on your response, my understanding is you use the daily charts for STOP limits. I have been using the 15's for a lot of my entries. It's my exits that I get confused about. I have been trying to use the 60's to scale out of positions. It does get a little confusing. I try to determine your exits and why you are exiting the position (what charts you are using) I am thinking a VIDEO on EXITS from Dwight would be awesome.
Chic
Chic, Dwight and Gang,
ReplyDeleteI was also stopped out of AA last week (and have since joined AA). I'll probably try to pick up some on a pullback tomorrow. I was stopped out of ESV by a dime and .70 on BTU Friday-OUCH! Same with WFT but I'm back in on the bounce (retest). Picked up some AKS and still hold X (looking to buy more above 185?) Picked up a few puts on CHL and realized my stop order on QQQQ with rules (stock price) also had a limit order-DUHH! Oh well hopefully it bounces and plays out.
Gary
Pretty wierd that the naz touched the 50 day exactly and the s and p bounced off the 50% fib retracement.
ReplyDeleteDo you breeze through different indicators to check if we are close, then make decisions off those or use them to confirm what you are thinking in the price? Or just fyi stuff to keep in the back of your mind?
Well, all was well until this afternoon. I must have misread the chart. I picked up some QQQQ puts at the 3:20pm bounce using the 5 min chart. Looked like it was nearing diagonal resistance of the 50 MA. What did I miss? Or was it just time to lose one?
ReplyDeleteDaniel - did you enter your QQQQ puts at 3:20pm EST? Looking at the 5 min chart that you traded off of, the probabilities were not in your favor. I see that it failed to make a lower low right before it retraced to where you entered. Plus it bounced off the $48 zone a few times and looked like a double bottom (almost a triple bottom if you zoom in). When I see this type of chart pattern, I will take a look at the stochastics and it did show a bullish divergence. So I would not have entered a put at this point. Just my opinion and throwing it out there to see if someone else sees it differently.
ReplyDeleteSteve: I will look at a combination of price, retracements,and moving averages for support areas.
ReplyDeleteChic: exit on the swing exhaustion for whatever time frame you decide is your base time frame. Typically it's the dailies, but it can also be 60m, 30m etc.
Daniel: if you were getting in 40m before the close, then you were getting in just as I was getting out. Remember, the Naz was bouncing off of critical horizontal and diagonal support on the dailies while you were looking for a put entry on the intra-days. See my market wrap comments from today.