Feb 292012
 

Someone asked me why I have support levels above the current prices and if they were resistance.  What that means is the level will be resistance but I’m not going to short it because of my bias.  So I’ll wait for the level to be broken and then resistance to become support and then I’ll look for my long entry.  I hope that’s not too confusing.  Technically I should write “I will wait for 139.10 to become support” but it’s easier to just write support levels.

The alternative is to write overhead levels as resistance and levels below as support.  But that wouldn’t reflect how I would trade them.  I’m open to suggestions.

 

Bund:

Bund bounced off my 139.58 area three times.  In C period (starting with the 8am open for A), it fell short and so I didn’t trade it.  Then in G & H period it was there but I was in my ES trade at that time.  It dropped below the level but then quickly bounced back up.  The third time was in US RTH when I focus on ES.  So it was nice to see my area was support but unfortunately I wasn’t able to profit from that one.  This tells me that I need to be more flexible with my levels and do as eminiplayer does and make zones.  I need to work on that, I’m not sure how to be as precise as he is for ES.  So my levels will be zones but I’ll just track the levels and be flexible when price gets close.  The Bund is more volatile than ES so it’s not possible to be so precise IMHO.

Since Bund balanced in an outside day, the levels remain the similar.  Warning of risk to longs is still in place.  It has poked above it’s trading range and was rejected back inside.

Support Levels: 139.00-139.10, 139.58, 140.02,

Resistance Levels 138.74, 138.60, 138.44-48.

Stoxx:

Stoxx is still in the middle of its micro-composite.  Expecting two-sided trade until it moves up or down.  Bullish bias above 2495.

Support Levels: 2508, 2522, 2529, 2452

Resistance Levels: 2495, 2486.

ES:

Big Picture:

ES tested higher and was rejected twice, once in Globex and once in RTH.  I’ve been writing that I’m just not seeing strength by the bulls.  There is not much interest in higher prices.  We may have to go lower to shake out weak longs and replace them with new longs.  1387 still on the horizon.

Bullish above 1363.00., Neutral 54.50-60.25, Bearish below 54.50.

Support Levels: 1360.25, 1363.00, 1366.75, 1371.25-72.75.

Resistance levels: 1363.00-64.50, 1360.00, 1354.50.

In the smaller picture I will trade some smaller levels in between the big picture levels:

After I wrote this ES dropped below 1363 which was an important level.  But we must develop value below 1363 before I change my bias to neutral.  We’ll see if this happens overnight.  Looking at the daily it looks pretty bearish but in the past these one or two day drops have been bought aggressively.  Let’s see if that pattern continues.

 

 

 

Feb 292012
 

Trade 4 – I misread my level on this one, I saw my alert which was 10 ticks ahead of my level and when I realized it I exited.

Trade 5 – This was the setup at my level.  You can see in the exit name it says “Stop1”.  Look at where my stop was:

My stop was around 10-15 ticks, I don’t remember exactly. It hit my stop but the simulator filled it +2 ticks.  That’s at least 12 ticks of positive slippage!  I’ve seen this a few times but never quite that bad, I’ve seen 3-4 ticks.  So this tells me that the Ninjatrader simulator is probably not accurate for fast moving volatile markets like Gold.  Who knows, it could have spiked down and back up and back down and maybe I could get positive 12 ticks slippage with real money.. but I think that’s very unlikely and I’m not willing to find out.

Trade 6 – Bund trade at my level but I exited because it was not moving and we were close to US RTH open.  It would have stopped out.  I wrote in my plan longs are risky.

Trade 7 – This is the same as Trade 3 in Globex.  Order flow confirmed the resistance level and I took it for a scalp.  I had no idea that would be the high of day as I was still bullish.

After that I had my goal of 2 ES pts/day per contract so I stopped.

For February I end up slightly positive on the ES.  I’ve done well in the last week but unfortunately I had a couple big losses earlier in the month.  So I’m happy to finish positive as that really helps emotional capital.  A losing day sucks but it is to be expected sometimes.  A losing week is hard to take.  And a losing month is really hard.

I also completed one month of sim trading Euro, Gold, & Crude.  Results are profitable but not much.  Gold was my best market but now I know why – positive slippage.  So while I cannot conclude the experiment was as success, it was not a failure either.  I have to conclude that any edge I have in these markets is very small.  I’m used to liquid markets and I cannot read “order flow” very well on the really fast markets.  As a result, I will focus on Bund and Stoxx/ES for the next week.  I need to do even more preparation than I’m doing and so best to focus on these.

Finally, today’s sell-off was not a total surprise.  I wrote in my previous post that I was not seeing intiative buying and so the sellers seized the opportunity.   But I expect more dip buyers to be active so the move up isn’t over yet.  If we build value below 62.25 my bias will switch to the short side.

 

 

 

Feb 292012
 

Today was a pretty boring session.  The markets opened (European open) around my support levels and had acceptance there so I didn’t take the longs, which would have worked.  I missed a good bund long because it stopped just short of my level.  I realize that I need to be more flexible with my levels and come up with 8 tick zones so that’s what I’m going to work on next.   But it didn’t bother me that I missed it because I’m very good about only trading at my levels.

I took two longs on Euro and scratched both because it was building acceptance there.  It would have stopped out on the big news-induced move.

So my best trade was one that wasn’t in my plan.  I didn’t see a good long opportunity on ES or Stoxx.  I almost shorted ES just before the news move and that would have worked in my favor, but it was not in my plan and wasn’t even at a key level, just top of balance, so I didn’t do it.

However ES made it to a resistance level at 77 (stopped 1 tick short) and having not made any money this morning I decided my only shot at making money would be shorting here.  The risk was small because either that level held or it didn’t.  Shorts are counter-trend and as such they’re scalps.  I put my target at 2 pts which was just above the current day VAH.  I didn’t get filled and it bounced up a point but I was patient and then got my fill.  The move stopped at 73.

 

I’m seeing a lack of initiative buying at high prices.  There is definitely a loss of momentum there.  Responsive buyers (like me) are still active at support levels but buyers are not willing to chase it up.  I see this as a sign of weakness and a potential pullback in ES.  1387 is the main target above and I thought we’d get it before a pullback but now I’m not sure.  We may have to shake out some of the late longs before we go any higher.  The trend is still up and I’m still focused on the long side, even if we start pulling back.