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Tag Archives: $6E_F

We Stopped Going Down That Is The First Step

The intraday volatility was certainly in place today as risk came off the table.  The S&P printed ten handles of selling with a few healthy rotations to allow short entry.  The Euro dollar via the /6E was confirming risk off too, trading in tandem with the /ES before going flat around noon.

Since around 1pm the market stabilized and balanced out.  The question on every bull’s mind is are we at an inflection point where this countertrend rally comes to an end?  I saw an interesting tweet from @StevenPlace that we have only had four consecutive down days twice this year.  The sellers certainly have been effective in erasing the euphoria that ensued post #NoTaper so perhaps a third data point is on the docket.

I will cover key levels to monitor on the S&P tomorrow morning to gauge sentiment and a potential turn around Tuesday, but as we close I get the feeling we will see overnight rotations and a sizeable gap to manage in the morning.

My portfolio is down a sultry two percent, championed by the broken wings of RVLT.  The weakness in RVLT neither surprises nor upsets as it has been my expectation for weeks.  Hell, I think it prints fresh swing lows to really get people off their rockers.  Ah, the stock market can be so cruel.  I will continue to dollar cost average.

I earned about 50% of what I made last week today trading futures.  It is good to see some intraday life coming back into the market as we enter Fall trading.

I cut off my Zillow loss early on and moved the funds laterally into AMBA.  I may be early to the AMBA party here as it is still consolidating.  Dash cam, FTW.

Top picks into Tuesday’s tape: AMBA and ELLI (no position currently in ELLI #want)

I also want some Miley:

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Shrinking Targets Ahead of The Fed

My journal work these last two weeks brought attention the fact that I had been nailing my entries, but getting stuck in trades, losing interest, and then just managing to scratch them and lose a few bucks.  I think this behavior was a byproduct of our coiling markets ahead of the Fed.

What worked really well this morning was taking smaller profits.  Thus far I have taken three wins in the futures: two in the spooz and one in the 6E.  I would still be in two of these trades, contemplating scratching them for losses, had I not lowered my profit expectations by one to two ticks. 

This is adapting, this is surviving.  You must be one with the flow, one with your environment.  I strongly believe once the market gets some visibility (after the reaction to the Fed reaction) we will return to an environment where I can push my profit expectations back to their planned levels.

I cut EXK, no other portfolio adjustments.

Be amorphous, like water.  And stay calm if the market gets wiry around 2pm.  Perhaps listen to The Buena Vista Social Club:

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Setups Galore—None of Which I Bought

Pull up daily and 30 minute charts of EGLE, GMCR, ACTV, and END and you will see beautiful charts, tightly coiled and ready to make explosive moves.  I want you to note I bought none of them.

I did however buy CREE and MHR taking my long exposure up to 75 percent.  I have another 10 percent in SKF, leaving me 15 percent cash to navigate tomorrows FED day.  That’s essentially why I did not buy anything else today.  I like the stocks I mentioned in paragraph one.  Any one of those could produce a big gainer.

Interestingly enough, after today’s CREE buy and pooling in RBCN, 40 percent of my book is committed to LED technology.  RBCN has some action off the new iPhone home button too, but their sapphire is an important material in LED production.  This is my very concentrated bet.  Parts of it aren’t doing too well.  Take RVLT for instance—the chart looks hellish, yep…technical term.  And I’m -30% on the name.  Don’t care.  I mean, I care very much, but the stock is a long term speculative hold.  AIXG cannot and will not break out of its consolidation range.  My cost basis is the only thing keeping me in this play because if it wasn’t near the bottom of this range I would have a harder time stomaching these waves.

I took one trade in the /6E today.  After /6e pushed lower, it pulled back to a place I could enter.  The trade went in my favor, all the way to my target, but did not fill.  This happens often, and it used to cause a great deal of anguish and regret.  I would be like, “I put my target out too far, now I will be getting the fuck.”  Now I don’t sweat the action, but instead manage that which I can control at this point.  The /6E very well could have put in another thrust lower, and it still may, but it didn’t.  Instead it put my position below water and then just held it there.  Around noon I took a step back, had a stretch, and asked the following questions:

What has the /6E done?

What is the /6E trying to do?

How good of a job is the /6E doing on the try?

It’s helpful.  I pulled my chart out a bit, noticed the /6e has gone very quiet, something I noted this morning.  The market open introduced a strong thrust lower, but not to fresh swing lows.  We’re making lower highs, but also higher lows: it’s coiling!  That’s what it has done.

To my eye, the Euro is trying to do two things: the bulls are trying to work out of a range bound trade that lasted an entire year.  They are not doing a great job so far.  The bears are trying to reject range highs.  They’re doing a decent job, but have been smacked about quite a bit these last 8-10 trading days.  As a result, the /6E is marking time until an unknown factor causes order flow out of this consolidation.

It’s doing a pretty damn good job consolidating as the EMAs I track had gone completely flat on top of the VPOC.

So then, what’s it likely to do?  It was likely to chop the consolidation range, the short trade was dead.  Instead of just clicking the buy to cover and taking a 0.00012 loss, I was lucky to catch a bit of movement in my favor and only lose 0.0006.  I didn’t want to be in a coin toss situation any more.  I covered.  My entry was good so I really have no complaints with the trade.  It just as easily could have continued rotating lower.

And now you have read though my entire lunchtime /6E perspective and my subsequent introspective.  Have a great one!

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Gentle Rejection Overnight

The overnight session was quiet, and the first thing to catch my eye is the way price kept bouncing off yesterday’s low at 1688.  There were four instances overnight where we saw buyers reject attempts to break this level.

As a result of all that time being spent near the lows, we have formed a very lopsided market profile overnight.  This gives us some interesting context clues as we trade today.

Many other markets are quiet too.  Take for instance, the Euro currency future via the /6e.  There has been strength but not enough to break yesterday’s highs.  Instead the Euro marking time with a gentle sine wave.  If however the Euro cannot strengthen this week, it could still be stuck in a bracketed range dating back to the beginning of 2013.

Returning to the /ESZ3 or $SPX December future, our key upside level of resistance is close at 1693.50.  When we broke down yesterday to commence gap fading we left a sharp low volume node at this price.  It can’t be seen as clearly on the below market profile charts as it is on a pure volume profile, but you will notice a split in the profile at this point and a value area low.  I’ve highlighted this level, other key areas of opportunity, and a few scenarios for today on the following market profile charts:


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