The strength we saw in the S&P going into the close carried on into the early overnight session, pressing up to new highs after the market closed.  This serves as an interesting piece of context because it is very uncommon for a swing high to be made outside of regular trading hours.

The overnight profile is balanced and features a poor low at 1685.25 seen as a triple TPO down at the lows.  This area coincides with yesterday’s VPOC which was able to migrate above the most of the key reference points we discussed yesterday morning.

I’ll be watching for a push to new swing highs today, and I’ll also be closely watching support from 1681.25 – 1682 should we see some selling come into the market.  These levels look like solid support currently, so seeing them break would be significant.

Overall, the market looks pretty strong this AM, let’s see if it can carry through into RTH.  I’ve noted some scenarios and key levels on the following profile charts:

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Sometimes we find ourselves wanting the market to behave in a certain manner.  When I went over all the charts this morning, my first thought was this rally is getting a bit long in tooth.  Then I observed a few more charts which firmed up my expectation that we may see a bit of a pullback materialize today.

But then I wanted the dip.

There is an old lesson in this thought process.  You can build expectations, but to want is to impose your will.  Imposing your will, or demanding, that the market conform to your expectations is like being mad at the ocean for washing your home away, irrational.

Anyhow, as much as it’s my expectation that today we see a pullback materialize, the market could just as easily continue climbing the wall of worry or trade sideways.  The overnight profile is top heavy but mostly balanced and we’re coming into significant resistance at 1682.50.  It didn’t surprise me to see the market stuck just below 1682.50 which represents the value area low of the distributions left behind in early August. This level is huge today, along with 1684.50 (VPOC).  If bulls can show price acceptance above these levels, we’re back into this upper value, and may rotate through it sooner rather than later.

Otherwise I’m looking for a pullback.

We had a poor low yesterday seen on the profile as a double TPO print.  If that gives way, I’ll be looking for gap fill trading to come in, pressing down back toward Monday’s high at 1671.75.  How much of this gap the sellers are able to fill (if any) will be an interesting piece of market sentiment as we close out the week.

Note: Today is contract rollover meaning many future traders switch to the December contract.  I will be watching the volume on both contracts and migrating over to the December contract when it trades move volume.  The above price levels are in reference to the September contract.

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Last week I was trying my best to call out my futures trades in the 12631 chat room because I often get the value added benefit of hearing other members’ take on the position.  However, it became increasingly stressful to provide timely updates on my positions and manage the trades.  I thought I traded last week in 100 percent accordance with my plan.  As a matter of fact, I did not.  Upon reviewing the tapes of my trading, I found a costly mistake was made during the fast markets on Friday.  It was my largest losing trade of the week.  It was managed properly, once entered, but it was not in proper cycle sequence.

I decided at that point to keep my futures trades to myself.  I do this for two reasons.  First to benefit me by giving myself a more clear mind when trading.  Second, I want to build my confidence in the trading cycle before I present it to the good people of iBankCoin.  My colleagues all provided the finest value added commentary, and I want to provide the same.

Today was a quiet session after gapping higher in the indices, but I was able to extract 3 handles of profit from the /ES using Bossram.  I extracted another 0.0012 in the /6e, so overall I had a pretty solid day in the futures.

Onto stocks, I built a pretty solid day in my swing portfolio.  CLF showed solid follow through today, but I took a scale, reducing my long to ½ size.

I finally closed out END, toward the end of the day, when the momentum ended.  This was a huge position of mine, one I wanted to parade down the warm streets of victory lane.  Instead I chewed off the bits of meat left on the bones and tossed the carcass into an alley.  I made five percent, at one point nearly nine percent, and expected to make twenty.  But with international sweetheart Vladimir Putin putting a damper on the war, my thesis is eroding.  I took money while it was still there for the taking.  I like MHR better anyhow.

I was watching the live bloggers at CNET cover the AAPL WWDC and when they mentioned Apple would be using sapphire in their latest iPhone’s fingerprint sensor. I queued up GTAT and RBCN.  I like both very much as part of my hedonistic desire to own all things LED, so the AAPL news was more an excuse then a pure catalyst to put sapphire back in my book.  I took down shares of RBCN mainly because I like the chart better.  GTAT is coming into longer term resistance here at seven as I mentioned yesterday.  RBCN has a nice pocket of volume above and a simple-to-define risk.

My final move on the day was pure stock market vagrancy: I bought a stupid amount of MJNA shares.  The ticker came to mind during a discussion with The Rhino.  He was discussing Funyuns which reminded me of Half Baked and before I knew it I went down to the corner and bought MJNA.  The chart looks interesting to say the least.  To say the most I see really heavy volume coming in.  Perhaps Doctor Phil is about to discuss the benefits of cannibals for bored housewives or something…

I’m down a smidge today, I kept my SKF on, and I’m still about 25 percent cashish.

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Markets are ripping higher overnight, pressing the /ES nearly to the top of the gap left behind on 08/15.  By the looks of the overnight tape many buy stop orders we triggered and a stop run ensued.  The question now is, will the buy flow continue to push the market higher, or will we see a big selling reaction to a perceived premium in the marketplace?

The S&P is currently trading ten handles above yesterday’s high, and nearly twelve handles above the closing print.  Therefore we are in pro gap territory where it is very difficult to play a gap fill trade.  However, we should keep the context of the gap fill trade in mind today if we see sellers start to recapture areas of support.

An interesting zone of price overnight is from 1674.50 – 1675.75 where price moved so fast, nearly no volume took place.  Price could revisit this area and give it a proper auction.  Should this occur, the subsequent move from the zone may give us some insight into who is more active today, the buyers or the sellers.

Given the distance the market covered overnight, my intial expectation as we approach the cash open is to see selling enter the market.  Initial downside targets are 1677.50 then 1675.75 and a possible gap fill to 1671.  On the upside, we have the lowest distribution from when we gapped lower with resistance at 1682.25 (VAL), 1684.25 (VPOC), then 1686.50 (VAH).

I’ve highlighted these levels and drawn out a few scenarios on the following market profile charts:

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Looks Boolish:

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Hello and good morning.  The globex session spanning from Sunday evening and into the early hour of Monday has been a quiet one, stable, and without much by the way of new developments.  The S&P printed a nice bell curve distribution overnight within the upper 1/3 of Friday’s range.

Both Friday and Wednesday left the very visible footprints of reactive buyers.  These show up as long buying tails.  We often speak about the big money being away during the summer, which is debatable, but last week certainly saw signs of heavy money flow.  Whether it was due to the new month or the pros coming back to work, I’m not certain.

What I do know is if we see the market trade back below these buying tails this week, that is going to put all of that aggressive reactive buying under water.  If price sustains above the buying tails, we may see a bit of confidence returning to the market.  The buying tails are key piece of information to measure sentiment against early this week.

I’ve highlighted several areas of opportunity on the following market profile chart.  I’m particularly interested in the confluence of support nearby from 1652.50 – 1653.  If the market cannot sustain trade above these levels today, the reactive buying on Friday comes into question as we enter the thin volume portion of the profile.  My expectation is for buyers to hold near these levels.

 

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Well it was a modest week of making money, until today.  In two quick swooshes the market took back my gains and more resulting in a losing week.  In my defense and in the defense of my cycles, this was a rough week to get started for the following reasons:

1. Holiday shortened week

2. Wednesday never once pulled back

3. Thursday (yesterday) was a freakishly quiet, like five in one hundred occurance

4. Today was a news driven monster truck rally

What’s interesting to note is this week’s losses did not damage my ego whatsoever, where I normally feel a bit aloof and edgy.  I think it’s because I’m sticking to my well laid plans.  The laws of large numbers will kick in next week, and I should recapture most, if not all of these losses.

All that being said, I lost money my first week live trading Bossram Alpha.  It only had one losing week backtesting from March 1 – present…go figure.

Before commissions, Bossram lost $675.00 and Elroi, the jackass helper robot lost $25.00 aka outperformed me this week by losing less money.

As a result, 10k has nearly become nine.

With more screen time, days like these will be some of the best of the year.  For now, they’re modestly priced classes in humility and market skill.

 

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Well how about that morning /ES session?  Quite the contrast to yesterday and the paint drying we were subjected to.

I had a great little scalp long at the open.  Then I engaged Bossram even though I wanted to see a test of yesterday’s VAH first.  I adhered to Bossram.  It took a loss on the long side, then it engaged short, and took a loss on the short side.

The bad news is I took 2 losses in a row trading Bossram, the good news is they trades were fully plan compliant, and could have been much worse had I not adhered to the plan.

Typically, it goes on a huge win streak at this point, so the key is to continue to engage.  But probabilities are probabilities, every trade is a coin toss.

Elroi scored one short for 1.75 handles and is currently taking heat in another short.

Onto my portfolio:

I sold some scraps out of my book, remaining runners in YELP, BBRY, and YGE.  I also bought more SKF.  Whether or not that trade works out is very much still debatable.

No reason to be down on these losses or saying adios to my winners, it’s time to dig my heels in.

 

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We want to keep an eye on the migration of value, especially now when we’re trying to decipher whether the most recent strength will sputter out, offering a quality short entry, or whether the market is taking a short pause, a wall of worry moment if you will, before continuing higher.

Last night’s session was nearly as balanced as what we observed yesterday morning, although much less docile, printing nearly an eight handle range.  Initially the S&P was weak into the late evening, but a bid came in near the European open and we moved back into the upper quadrant of yesterday’s action.   We have some important data coming out in a bit from the NFP that could get us moving.  The key take away from the current profile is where we set value relative to yesterday’s session.  The value did move slightly lower, but still within the value area from yesterday, showing little has changed in terms of market perception, and the momentum is still in the bull’s court.  Again, this could either change or strengthen post NFP.

I’ve highlighted a few areas I’ll be looking for trades and the above observations on the following market profile charts:

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I had a flat tire when I woke.

The markets took a pause for the most part today and although a calm, balanced day should be high on your expectations following a trend day today was borderline absurd.  The first hour of trade is referred to as the initial balance.  The probability of taking out neither the high nor the low during a day session is less than five percent over the last five years of data.

Today we witnessed a tape so benign it was special.  I took a long at 10:30 AM, missed my profitable exit around 3pm, and scratched the trade break even at 3:10pm.  You wouldn’t believe the frustration that trade produced.  I mean, I look at a stock trade like RVLT, slowly bleeding the lifeblood from my person, like a particularly pestering mosquito.  Eventually winter comes and it freezes and dies.  But each /ES position carries a marginal value over $30,000…which is why I like my gratification instant.  My algo, Elroi was dormant today.  I expected as much since Elroi thrives in high velocity conditions.  Bossram put me on the right side of the opening bell and I extracted 1.5 handles.

I beat my head against the urinal wall then ate several hummus treats.

I had quite the laugh when I saw my boss for the first time today and, I kid you not, he was wearing a full Canadian tuxedo.  It was so majestic.  The only wardrobe piece missing was a mystical wolf tee shirt.  He also wasn’t rocking the official Canadian belt buckle.  Needless to say, it was a clear omen from the stock gods and I sold the majority of my BBRY long.  I’ve kept a 1/3 runner in case Wayne Gretzky makes a surprise move onto the board of directors.

The wires are reporting AMBA in fact beat expectations, as was written in these halls for months by our fearless leader, Senor Tropicana.  As you know, I exited the position yesterday, but I’m still bullish on the name.  The GoPro is as cool as RedBull these days.

I slapped on a pretty sizable SKF position into the bell.  It seems in slight haste in hindsight, but I had just untethered myself from the /ES and found the action excessively befuddling.  Therefore I thought it prudent first to sell one of my longs.  But I looked at all of them, the little rug rats, and I couldn’t part ways with any.  So I tossed on the SKF hedge.

I sold a little bit of YGE but I’m keeping a small piece just in case it keeps going.

I took nearly a full size position in CLF early on, it looks hot.

Time to go home.

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