Name: Bala
Web Site: http://implicittrading.blogspot.com/
Bio: I'm an intraday Futures & Equities Scalp Trader. I'm at my best when engaged in an intra-day market conversation. My average holding period is 39 mins and I average 5 "round trip" positions per day. I use Relative Volume, Momentum, Intraday Structure, Sentiment, Volume Profile and Market Context to trade. Up until four years ago, I was a comedy commercial and music video director. Oddly, my experiences in production proved to be highly valuable for day trading.
Note: I also show an equity scalp trade that I completely dropped the ball on……. ‘Douche of the Day’ definitely goes to me.
Areas needing improvement
- Exercise (even) more patience during the opening drive
- Fighting for ticks can sometimes be costly in loss of opportunity in other markets. I withdrew my attention away from BBBY and lost a great opportunity. Of course I could have gotten back in but by the time I went to check the chart, price had already taken off leaving me with no low risk entry
- Work on trade visualizations
- Be sure to verbally identify at least four statistically proven reasons supporting a trade idea before entering. (I sometimes slack on verbalizing but when I do, I always trade better)
Summary Opinion: It looks like the market wants to move up (sans an exacerbating Sovereign Debt Crisis) and at least retrace a healthy portion of the move down. Of course we could always chop in a range (and or sell off) until the Greece situation (along w/Spain and Portugal) finds a resolution (lest we forget China’s steps to curb lending); but for now, I’m more apt to cautiously subscribe to a continuation of the recent bounce.
Weekly ES Profile
In the very short term, it looks like the 1065 and 1085 zones hold the majority of importance for now.
Relative Strength.
The Russell 2K, Homebuilders, Health Care, Oil (not shown) and the 10 Year Treasuries (not shown) have been showing notable relative strength during the recent market activity.
Relative Weakness
The SPYs (relative to the IWMs and Qs), Financials and Utilities have been lagging the recent bounce. Financials have often been the last core sector to join the intraday rallies of the past few days. Specifically, JPM, BAC, WFC, etc, have been showing relative weakness. (p.s. I usually don’t trust the XLFs performance alone. I often scroll through the major and regional banks to get a better feel for the sector.)
Note: Be sure to check out MACD’s readings on all of these charts. While it looks promising for a continuation upwards, I am reminded of the saying, “When everyone is thinking the same thing, no one is thinking”.
Today’s breakout was everything you could have asked for aside from the lagging of financials during the initial thrust up. Bonds, Commodities, Core Sectors, Maj. Averages, Relative Volume, Baskets, TICK distribution, Market Internals, etc, all confirmed strong pro-risk theme. Note: During early morning trade, the RUS2K (and its derivatives) were showing relative strength.
Judging by recent trade I suspect we’re trading a news driven market and very emotional market. Its a bit tougher to fine hard lines of support/resistance. Instead, we seem to be muddling through areas of tepid interest (whatever that means). I reviewed about 100 charts tonight and many equities are trading in a loosely defined range.
The USD has been ‘arching’ its way down and the EUR has gained in recent days. Both currencies will be testing zones of potential support / resistance in the very near future (likely tomorrow) and perhaps we’ll get further hints as to which way these markets are wanting to go.
Crude has also bounced but has not yet been able to overtake the 74.00Barrel region with conviction.
The Russell 2K are weakest of the E-Mini Future Contracts but only by a small margin. The Nasdaq100 (NQs) have an ever so small lead and the S&P ES are right in the middle.
The master blaster rally at lunch time saw a very large TICK reading but there was no additional follow through.
Candidly, I’m not sure how to interpret today’s opening action. By the numbers, the NYSE A/D went from +2100 at the open down to 896 before rebounding strongly. Distribution was not convincing either way (buyers took their turn – sellers took their turn). This mornings gap was a healthy size and often a precursor to a trending day. Its not uncommon to retrace 50-61% of a gap this large before trade resumes in the direction of the gap (as was the case today). So, given that we rallied wasn’t too big a surprise; however, the amount of volume which accompanied that move was eye opening. Its not every day you can target a 15handle move in the ES but then again, its not every day we see 400K contracts traded during the 10:30 – 11:00 CST time frame.
Materials, Energy Financials, Health Care were the most ‘flacid’ on the day while Industrials, Cons. Staples, and Utilities held their own for the most part. Cons. Discretionary outperformed.
ES dropped through its overnight range three times. I suspect the above average weakness of the IWMs and above average strength of the Qs, put the SPYs right in the middle and some ’softness’ (i.e. not adhering to rigid price levels) should be expected. Furthermore, set today’s trade against the backdrop of a possible trend change (suggesting the past few days are only a bounce seeing as the Russell2K and S&P rejected the underside of their 50DMA; noticeable selling into strength from many of the stocks I scalp, and an over all lower relative volume); and what it appears to be a more fragile economy (shocking), some market tepidness would be a reasonable reaction.
*However, there was also positive sentiment divergence and improving internals for much of the day. The Qs showed relative strength today and they’ve been a market leader for some time.
So………….. Where this takes us? Who the f_ck knows.
By the way; volume has picked up dramatically during the 10:00CST – 11:00 Time Frame. Those two periods have been running ‘hotter’ relative volume for the past 7 days in a row.
Materials, Energy Financials, Health Care were the most ‘flacid’ on the day while Industrials, Cons. Staples, and Utilities held their own for the most part. Cons. Discretionary outperformed.
ES dropped through its overnight range three times. I suspect the above average weakness of the IWMs and above average strength of the Qs, put the SPYs right in the middle and some ’softness’ (i.e. not adhering to rigid price levels) should be expected. Furthermore, set today’s trade against the backdrop of a possible trend change (suggesting the past few days are only a bounce seeing as the Russell2K and S&P rejected the underside of their 50DMA; noticeable selling into strength from many of the stocks I scalp, and an over all lower relative volume); and what it appears to be a more fragile economy (shocking), some market tepidness would be a reasonable reaction.
*However, there was also positive sentiment divergence and improving internals for much of the day. The Qs showed relative strength today and they’ve been a market leader for some time.
So………….. Where this takes us? Who the f_ck knows.
By the way; volume has picked up dramatically during the 10:00CST – 11:00 Time Frame. Those two periods have been running ‘hotter’ relative volume for the past 7 days in a row.
I spent more time scalping equities today so I may have missed some of the day’s developments. One scalp in particular would have been a heart stopper had I not spent the last 8 months visualizing the very situation. So instead of crapping my pants outright, instead I begrudgingly soiled them……lol….
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Health Care Bonanza
Written by BalaMarch 5th, 2010 at 3:46 am
Health care gave lots of nice opportunities
And NAFC
Charts, Commentary, Market Indicators, Markets | No Comments