Rhody Trader

Today was definitely an interesting one. Run it up. Run it down. End relatively little changed.

Yes, I made some money. I should have made more.

The main levels to watch at the start of the day were Friday’s point of control at 1422 and the 1431 level which goes back to a January failur point. The 1436 area was an important one over January 8/10 as well, and 1444 was a rejected peak area from near the start of the year.

I wanted to buy at 1422, but the market didn’t give me that entry. I then tried a tentative short near 1431 when it looked like the market might have stalled out, but obviously it kept going.  After it rallied through 1436, though, it couldn’t must enough punch to reach the 1444 area, so when I saw the momentum failing once more I got short.

Unfortunately, I got out when the market held up around 1431 again. Once more that level burned me. I could have made something close to another 10 points had I been more patient.

Today was fun! Lots of tradeable action in both directions. Actually, it was a lot like yesterday in terms of the way things played out.

The open was right in the are of 1410, so a bit above yesterday’s range. That put the market into the area of the thin value zone running up to around 1420 from last week when the highs were put in. As a result, we had 1406-07 as the lower reference point and 1423 as the rejection point above the market. In the morning the 1413 and 1418 levels – minor points of control from those thin value days – provided the brackets for what would eventually become the day’s main value zone.

Alas, I missed out on the fun of the rally.  I really should have gotten long when the market was down around 1410 to play the seemingly inevitable run up to 1420. I didn’t, though. That move back down, however, I did catch for a nice gain. Today’s action was in many ways the mirror of yesterday in that the market eventually back-filled the A period area that hadn’t been overlapped earlier in the day. That gave me a good idea how far the market could fall, and thus a good exit point.

I really couldn’t have nailed today’s range any better. Too bad I didn’t take a little better advantage trading it.

The market opened today on the high side of 1405 which put it a bit below the 1406/07 points of control from back on May 5th, above which the distribution got real stretched last week. On the downside was the 1396/97 combined points of control from Thursday and Monday. That provided a really nice range for the day.

When the market ran up to the upper bracket I took the short because the market wasn’t showing any underlying strength. I then was able to play the move down to the lower end of the range, picking up decent points. Unfortunately, I didn’t reverse at that low point and make some more nice points on the ride back up.

The start of today’s session was fairly predictable. The end, a bit less so. I was expecting a bit of backing and filling on a day that otherwise didn’t offer much to be excited about.

The market started off around 1390, which put it nicely between Friday’s 1388 point of control and the one at 1396 from Thursday. The other meaningful point of reference was 1400, above which prices were rejected on Thursday.

The market didn’t rally up toward 1396 right away, which is kind of what I expected. Instead it went the other way. It might not have nailed 1388 right on, but it didn’t go far enough lower to get one thinking a breakdown was happening either. In hindsight that was the buy point.

The market eventually did reach up and tag 1396. After a short pull-back, it then proceeded through. I tried a short, but obviously it didn’t work out. No worries. The 1400 level should still be resistance.  That it was, for a spell. Again a short didn’t work out. As the market demonstrated more strength than expected – or just a lack of sellers.

After yesterday’s (and Tuesday’s) long thin distributions, a balancing day was inevitable and that’s exactly what happened today. The 1396 level represent last Wednesday’s point of control, with 1406/07 being the upper reference point (Monday’s point of control) and 1387 (rejection area from last Thursday).

The 1396 level ended up being the central point. Today was about playing the edges of the balancing day and nothing more.

Today was definitely and interesting trading day. It was a bit nervy at first, but then developed nicely eventually.

The market opened up at about 1420, which was where it closed yesterday. All fine and good. There were a couple of very important reference points nearby, though. Above the market the 1423 level goes back to January as a point of rejection on a couple of occassions. The market was unable to even get there Tuesday. Below the market the 1418 level was yesterday’s point of control. My view going into the day was either the market was going to break out through 1423 (and probably run to the mid-1430s) or it was going to reverse. In the latter case, the pace of yesterday’s advance made a quick return a decided possibility.

The key was 1418 in my mind. If the market dipped down and held there early on a rally through the 1423 level became very likely. If 1418 failed, though, watch out below! Things were choppy in that first 90 minutes, but the market eventually shifted into trend day lower mode (it was very obvious in E period when 1412 was broken) at which point I got on and just rode it down for a nice pick-up.

Sorry I didn’t post this last night. My neck was bothering me sitting in front of the computer.

The market opened the day around 1400, which put it right between the 1396 point of control from Wednesday and the 1406 point of control from Thursday. That provided a great opening balance range expectation, and it’s basically what happened.

As you can see, A/B/C periods filled out the 1396-1406 area, after which the market broke out into a trend day higher. I’ll admit, I didn’t really see that coming. I figured that value would probably continue down, but clearly it didn’t.

Today wasn’t much to talk about. Value slid lower, which was to be expected after the moves late last week. I’ve plotted on the chart lines for Thursday’s 1406 point of control and Friday’s at 1412. Notice how the market spent most of the day right between them.

The rally higher was always going to be something to fade, which is what I told my subscribers this morning. There was the chance for a go with trade to develop later on when 1406 was broken, but the sellers just coul

The less said about today’s trading, the better.

I did something boneheaded. I put on a short position in the latter morning when the market looked like it was stalling out in the middle 1390s. It just hung around there for a while. I got caught up writing a comment for the service I work on, then got called into a meeting and forgot all about my position. When I got back to the screen I was under water by 11-12 points.

“Didn’t you use a stop?”, you’re probably wondering.

If I’m in front of the screen and know I’ll be there relatively undistracted, I normally don’t. There is a simple reason for this. I generally use how the market is acting from a few different angles to decide whether I want to stay in or get out. Oftentimes that means making a quick exit of a trade. This is something that improves my R performances as I often get out at less of a loss than I would have had I just used a stop. Not having the active stop in then takes away any risk of my accidentally getting stopped into a new position because I didn’t get the order cancelled in time.

Yes, though. If I’m expecting distractions or going to be away from the desk, I do put in a stop. Well, I usually do.

For the sake of discussion, though, today’s initial key levels were 1382 where they were rejected back on April 25th, and Tuesday’s point of control at 1393. A run higher to 1400 or so on a break was predictable, though it was suprising to see a continuation on a pre-Payrolls session.

Today’s action was about the biggest no brainer you could ever imagine – well at least before the FOMC announcement, anyway. The market was going to open between Monday’s 1401 point of control and the 1393 one from Tuesday. That meant it was very, very, very likely to stay between the two on a day when the really important thing wasn’t going to happen until late in the day.

 

True to form, the market traded down to the lower band point. I got long there and later got out when it move up toward the upper level, booking a few points. After that I just sat back and waited. No sense messing around in a narrow market ahead of a major event. Things tend to get screwy as the time approaches.

The other predictable thing was that if the market was to move higher it was going to take out the 1404 highs from Monday since they were never rejected. The market didn’t quite get to the 1410 level, which was the January monthly point of control for the S&P 500 index, but they got close.

Things were crazy in that first hour after the rate announcement. Eventually the market took out the 1393 level, and I almost got short. Given the volatility, though, I didn’t think it was such a great risk/reward set up, so I skipped it.