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Tag Archives: $ES_F

Read The Morning /ES Report

Heavy sell flow in the globex session, most notably just after US market close and in the early premarket hours of the US session, have seen the price of the /ES down as much as 10 handles since yesterday’s close.  Mounting tensions in Egypt, Cisco earnings,  and the overall benign action of August appear to have motivated sellers into the market.

If you zoom back and view the bigger picture via a daily chart, you’ll see the market formed a tight consolidation triangle, compressing price, before bursting lower.  This type of move can carry a lot of energy, but thus far has only taken us to the low end of an otherwise bracketed market.  See below:

ES_DAILY_08152013

When I look at my 24 hour profiles (second profile chart below) and start envisioning what trade may look like today, the first thing I notice is the thorough auctions that took place above.  They have formed nice, smooth bell curve distributions suggesting a solid auction of the price levels took place before the market decided to head lower.  Therefore, no unfinished business was left behind for the market to clean up before heading down.  It’s just a thought really, but adds credence to a possible deeper price correction.

The relevant levels of support coming in on our RTH chart date back to mid-July, 07/16 to be precise, which should give you an idea of the churn we’ve been experiencing.  I’ve highlighted these levels, as they will become shockingly relevant as today plays out, along with a few scenarios for today.

The best trades often fly in the face of recent market activity and if support holds, we could be in for an abrupt rally back to the top of the bracket next week because the overarching trend is still higher.

 

ES_MarketProfile_08152013

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Taking a Beating and Liking It

Take your fancy words like masochist and stow them under your chair.  I don’t want to hear them.

YOU SHOULD SEE MY PERFORMANCE CHART OVER THE LAST 3 MONTHS, IT LOOKS LIKE THIS:

///////// \\\\\\\\\\ ////////// \\\\\\\\\\\\\\\\\\

That’s literally how it looks if only to see the chop a bit more pronounced.  MY WHEELS are spinning, you see?

LED stocks as a whole are retracing their 2013 gains after the tepid Q1 forecast from CREE.  To call the move in CREE a retracement however, may be an understatement.  This is panic and margin calls rolled into a giant blunt and smoked, like a clown, by yours truly.

Of course I bought some more CREE today, adding to my [still] green core.  I bought some into the closing bell for $58.85 #timestamp.  Even if only for a trade, I can’t stand by idle and watch my ‘ace boon coon’ CREE get bludgeoned by panicking idiots.  Oh and believe me, I have more bullets to fire at these bitches while they’re concentrated in this back ally trough.

I’m telling you now, send CREE lower, I want it lower.

Send RVLT down too, I’m patient.

I have zero edge trading earnings let’s make that clear as crystal, which it already should be.  I’m building investments here…they’ll make fine x-mas presents.

MOVING ON, AGAIN

I cut some small names off my books because the /ES was trading in a downdraft.  I cut PBF, KWK, and ONVO.  I made a killing in ONVO, BTW.  The other two, not so much…

Speaking of the /ES: There’s simply no way for me to broadcast my strategy out to the world.  Back testing and optimizing has created a medium frequency beast that even I can be overwhelmed by.  I took ten trades in the /ES today, 7 were winners and I made 160 bucks trading a 1 lot.  When this system is making 160-250 bucks per contract 4-5 days/week, which it will, it can be scaled to as many contracts are needed to sustain my lifestyle.  Cool, yes?  Then I can abandon this corporate hole and go work for Cree or something.

I’m down a percent and a half today.  My cash is nearly 40 percent partially because of a series of decockings and partially due to the aforementioned sales.  Why the silver trade is back on, I have no idea.  When I return to winship lane I will be wearing an undersized tunic so you can admire my cajonies.

I want you to take that thought and hold it close this evening.

http://youtu.be/G8rGNk6vkM4

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Some Upside Momentum, But Indecisive

The market drifted lower overnight, not accomplishing much, but setting a higher low: the third in a series of higher lows since the market sold off Sunday night.  The momentum to the upside isn’t nearly as enthusiastic as we’ve seen throughout the year.  Instead it’s a bit more lethargic with price making a higher-high by only two ticks on the last trough-to-peak move.

The moves are also violent and with a smack of indecision, offering large chop often 10 handles wide.

I don’t have much directional conviction currently, but I’ve highlighted some key levels that may give us insight as the day progresses in the following market profile chart.  Sustaining trade over yesterday’s VPOC at 1691.75 would mark good progress for the buyers.  Conversely, taking out yesterday’s value area low at 1684.75 sets us up for scenario 2 on the below 24-hour market profile:

ES_MarketProfile_08142013

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Damage Control

I’ve been nursing a few position this morning, namely OCZ, which has me somewhat sidelined to the other opportunities our markets present.

In terms of momentum trading, this is where you buy YELP, down here in the trough, if it shows any signs of strength.

Several of my other stocks are in the red.  I wish some were more in the red than others so I could buy more, but the day is young.

Our morning idea in the $ES_F was to see some digestion of the overnight move because it took the markets into overbought territory.  The sellers had more than a mere digestion in mind and put us firmly into scenario 2 from the morning report which called for backfilling yesterday’s short squeeze.  That task has been completed and the buyers are right back on the scene, keeping us in the churn.

The buyers could turn this thing around by holding above 1686.75, and we would target an upside move to test the daily high at 1690.50.

 

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Digesting The Overnight Strength

There was a sense of pressure building on the offer as we closed out regular trading hours yesterday.   Pair that with the poor high set on the market profile, which built context going into the globex session that we would take out the high.

The market has actually gotten a bit ahead of itself overnight, and it wouldn’t surprise me if we saw a bit of churn this morning while the market decides if it wants to accept the overnight progress. I’ve highlighted a few scenarios about how today may play out, and highlighted levels I perceive to be opportunities on the following market profile charts:

ES_MarketProfile_08132013

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Monday Weakness and The Opportunity it Presents

The globex session in the /ES has been dominated by the sellers thus far who have pressed us as low as 10 handles off our Friday closing print at 1686.25.  Price seems to have made a run at the first lot of stop orders placed by longs last week, and has since stabilized a bit, although sellers have the momentum currently.  The markets were weak during the Asian session, but another burst lower occurred around 4am EST, around the open of the European markets.

I’ve highlighted a few scenarios for today’s action and highlighted the price levels I perceive as opportunities on the following market profile charts:

ES_MarketProfile_08122013

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They Have Been Accumulating This Tape for Weeks

Cumulative delta is often mentioned when discussing the trading of futures likely because the information is more available in the futures than it is on stocks.  For any given timeframe on a chart (ie 2500 contract, 3 tick, 5 minute) the cumulative delta for each bar is calculated as follows:

Trades executed at offer – trade executed at bid = cumulative delta

Thus a positive delta means more trades are being executed at the offering price, where a negative reading would mean the opposite.

The data lets us peer into the order flow and see which party is more active or aggressive when entering (or covering) their trades—perhaps using market orders or “hitting the bid” when selling or “taking the offer” when buying.

Zooming way back on the cumulative delta and applying a moving average filter to it, we can see that the /ES_F (the future contract traded on the S&P 500) has been steady accumulated since around 8:30am on July 25th:

cumdelta

The ramp in cumulative delta started at about 1670. Price action since 1670 has been working through an anxious return of confidence phase where we wall of worry higher before getting an actual move.  It’s another reason why I’ve been buying dips all week.   Seeing that level taken out would put two weeks’ worth of accumulation under water.  Bulls don’t want to see that.

That’s my big idea for the weekend.  I’d love to hear your take on it.  Have a good one,

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Friday Opportunities

The market caught a downdraft overnight that both my algorithms and I were modestly surprised to see.  We’re still riding through choppy indecisive waters, but the sellers have the early edge.

We’re catching a bit of a rally off the globex low of 1686.25 and it will be important to see how the market treats 1690.50 early on.  This level represents the value area low of yesterday’s session and if sellers are able to reject price away from the above value zone, the market could work to discover value lower.

If you look below at the orange scenario on the 24 hour profile, it would also come as no surprise to see the market work back through this large value zone and take out the double top at 1697.

I’ve presented these possible scenarios and relevant price opportunities on the following market profile charts:

ES_MarketProfile_08092013

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High Opportunity Session in the $ES_F

I only took one trade today on the /ES as I had more important matters to attend to, but I must say this was one of the most high opportunity trading sessions I’ve ever seen.  The market took on a lovely rhythm and formed a near-perfect sine wave across time and price.

We opened right below key resistance at 1697.25, price stalled out a tick below at 1697 soon after the open as sellers aggressively reacted by rejected the perceived premium priced into the market overnight.  After reverting to the mean, the momentum of the sellers was enough to press us deep into yesterday’s session where we saw an aggressive entrance by the buyers only ticks above the low volume node highlighted as support in our morning report.

At these lows, the volume delta gave us a wonderful shade of red indicating heavy volume being done on the bid by either panicked longs or very aggressive short sellers.  Their combined activity, I believe, and the quick reversal put many participants in the hole. Then heavy volume rolled in, but price was stabilized and the traders down in the hole acted like combustion inside a rifle barrel.  Their rush of trades propelled the market at a high velocity.  Five handles of progress was made in an hour’s time and then seven more taking us right back where we started.

May there be many more days like this, in a time where I’ve committed my full attention

Check out the morning report where these levels were highlighted as opportunities

http://www.youtube.com/watch?v=hVFgkirUakM

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Mapping Out Potential Paths of The Market

The market pressed higher yesterday evening during the Asian session and spend most of the early AM hours consolidating the move before going on another rally as we wake up in the USA.

I was watching the how the market formed a double top at 1689.50 yesterday and made note of the level as vulnerable.  Sure enough we’ve traded through it and should we trade back down to the level I’ll be looking for signs of buy flow.

If we see price holding above 1695, it may not take much effort to lift us back to Tuesday’s high at 1700.50.  Low volume profile tails, in this case a selling tail, tend to get back filled.

I’ve highlighted a few scenarios on the 24 hour chart, and marked up important levels on the RTH profiles:

 

ES_MarketProfile_08082013

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