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Tag Archives: $SPY

The Levels Precluding Our Next Break

Yesterday was essentially a completion of Monday’s auction.  The charting software I’m currently using won’t allow me to merge these two profiles together, so we’ll have to visualize it for today.

Notice the very fragmented, low quality trade that occurred in the upper 1/3 of Monday’s profile.  Now notice how much of Tuesday was spent thoroughly auctioning those prices.  Interestingly enough, yesterday was also a neutral day, featuring range extension in both directions, signaling a lack of directional conviction and the possibility of a change in the market conditions.

We’re still above the large balance distribution from last week, the overnight session is balanced within our current profile, and we’re essentially waiting for the market to tip its hand.

Here’s the levels I’ll be monitoring to gauge which way the market is trying to go, and how good of a job it’s doing:


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Morning Future Trading Report

Lots of movement today, as a result there were several trades in the $ES_F.  Ten contracts were traded in total, 6 winners, 4 losers. I want to get this more like 8 winners, 2 losers.

All the trades came on the short side today, with the best being a sale at 1669.25 and riding down to 1664.75.  The worse was a sale into the hole at 1661.50 which didn’t stop out until 1664.25.

The total activity netted a small gain of $100 dollars and a grey hair or two.

Repetition is key in the futures market.  I was talking to a friend of mine who works closely with Special Forces.  I asked what they do in their off time.  He said train.  He said they have layouts of the buildings they plan to raid and run through mock up copies in simulation over a 1000 times before the real deal.  That’s real deal awesome, and why they have high 90 percent win rate.

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UPDATED: Fragmented Volume on Top, Balance Zone Underneath

dr_evilThe overnight session has seen sellers trying to gain a foothold.  Most of their overnight attempts have been thwarted but they appear to be gaining a bit of traction as I’m preparing this analysis.

We’re still above the major three day balance zone I highlighted yesterday morning.

The behavior of volume on the upper half of yesterday’s range is fragmented and signals a lack of trade facilitation.  It’s odd really, it wasn’t a sharp reaction from the sellers but more running out of buyers.  Either way 1666.75 was left behind as a near no volume node and is the primary resistance to the upside.

It’s looking like we may test the balance zone today, and along with it my expectation is for some choppiness.  Buckle up.

UPDATED NOTE: We put in a double bottom at 1661 overnight.  It’s close to yesterday’s low 1660.  A test of this area seems likely and important.  A break of 1661-60 should have us looking for swift trade back to the balance zone below.


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Is The Music Over?

We’re seeing reversal action in some of the pockets of strength, including solar.  But it’s not lights out yet.  We’re still above the major bias line highlighted this morning.

I’m still considering the $ES_F range from 1654.75 – 1657.25 as the bias zone.  We can turn out a few lights if price is accepted below here.  Until then, swing away.


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Hot Trading Action in The Stocks

Stocks are strong right out the rip this morning, with the S&P tide pushing all these jet boats (momo stocks) higher.

In the futures, I’ve traded four contracts, all to the long side, earning 1.5 handles, 3 handles, 1.5 handles, and a runner.  UPDATE: Closed the runner, 3.25 handles.

I kicked out SAM after initially thinking I would make it an investment.  I don’t want to be invested in SAM.  I like Pabst if I’m going low end, New Castle if I’m being normal, BUD for sports drink, and anything brewed at the micro capacity from Michigan all the time.  So why own SAM?

I sold LOCK too because it had a chance to be great and it decided going sideways was cool.  What a wimpy stock.

The solar trade is complete madness.  I love it.  These ‘late stage” conditions give a huge edge to the small trader who can ferret in and out of the crazy names.  My wild boy is Scotty.  SCTY is the proverbial stone that kills two birds, giving me a piece of Elon’s sweet ass and solar exposure. With that in mind, I’ve taken two scales, and am down to a runner on SCTY. You guys are crazy so I want to see how far your crazy gets me.

Don’t sleep on JRCC, it’s way out of balance after we learned Friday that they bought a little more time in their debt structure. I want to see the imbalance push higher, obviously.

New longs are YELP, and CRZO and cash is low low low, 25 percent.


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Three Days of Overlapping Value

Coming into the week, we have three days of overlapping value to use as bias for direction into the week.  Last week featured a very similar overlap of value and seeing acceptance of price above the big value gave us conviction to the long side all week.

The same weight should be given to the three days of overlapping value this week.

The overnight session has been flat thus far.  The only notable development was the rejection of Friday’s HVN on the upper volume node at 1664.50 which I consider the only line in the sand stopping more upside.

Here’s a markup of the other important S&P levels:


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The Excess Low and What It Means Today

The overnight session has seen the S&P index as much as seven handles higher from yesterday’s close, putting in two rather methodic rotations higher.  The resulting volume profile is wide however, which paints a more neutral picture of the session.  We may need to see more profile development before we’re able to build any context from it.

The key feature of yesterday’s profile is when price “fell out of bed”.  A liquidation took place at 2pm and price tumbled 9 handles lower before recovering off the lows by about 33 percent.  The resulting action left behind an excess low at 1647.50.  Someone, aka they, found the price such a bargain, they snatched them up with aggressive reactive action.  Should we trade back down to this level and the market doesn’t receive the same aggressive reaction from the buyers, we can take it as a sign that something has changed, and position for lower trade.

I’ve highlighted this excess low and other key levels in the volume profile look, enjoy:


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Morning Future’s Report

The morning session is balanced, and somewhat choppy.  The rotations don’t seem to make much progress and I got caught up in the noise with several trades.

I went 5/14 giving me a win rate of 36 percent.  My best trade was long into the 11 am hour catching a drift higher that earned 2.5 handles.  My two worse trade were chop along the VPOC each carving out 1.75 handles on two units.  Net-net I was down on the session.

My best position was shorting into the 10am Philadelphia fed number.  The market was bid up into the number, ran some stops and then reversed lower.  I covered far too soon, taking only 1 handle out of the 7 handle move.

Biggest area for improvement is waiting for a bit more conviction before trading from the middle of the value area to the outside.

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Quiet Overnight and the Interesting Price Level Left Behind

Another quiet overnight session, forming the familiar bell-curve within yesterday’s fat value area.  This tells me there haven’t been any significant developments overnight.

The ten handles swing lower seen during the ES afternoon suggests emotions are building up in this tape, but hardly suggests complacency.  When price knifed lower to the scene of the early breakout, it was met as a huge buying opportunity.  The low volume node left behind at 1648.75-1648.50 is an interesting byproduct of that swift rejection.  Should the bulls not defend this level in the same manner on a retest, I’ll take it as a cue that sentiment has shifted.

Early on, perhaps even premarket, I’ll be looking for a test of the 1648.50 level mentioned above.


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Let Us See The Afternoon

I had a solid session in the $ES_F.  I was working a long trade inside the VPOC.  On my first trade, I earned 1.5 handles on one piece and then scratched the net +2 ticks.  Then I re-entered and earned 1.5 points on my first piece and 5 handles on the second.  Nice little victories to have, all according to plan.

I jostled my portfolio up a bit, selling another 1/3 of my ANGI after the housing stats.  The housing numbers came out in-line/better than expected and ANGI had a nice morning move.  When it didn’t pump alongside the overall market, I took the cue to scale some profits.

I also started buying JRCC.  There’s a lot of good guys in this trade, for various reasons.  I’m in it for the little 5-10 percent, you know that.  That being said, I want to see this trade get moving soon as it hasn’t quite turned the momo corner.  Developing…

Look at Ford, wow, good American breakout.  I’m taking a step back this afternoon and smelling the roses.  I want to see some afternoon action before deciding to buy more stocks or sell down what I have.


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