Value of Perfect Information

I gotta keep it short and sweet today, so no ES trade review.

My ES trading has been minimal lately because my performance has been slipping.  I’ve been focusing more in the equity markets.  Today’s charts:

CLICK HERE FOR TODAY’S ES VIDEO

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)

Chart Review of the ES, Core Sectors and Major (ETF) Averages.  Not that I’m offering anything you couldn’t do yourself but I thought I’d upload the charts I’m always watching and provide a few comments.
* I didn’t include charts of market internals but you can always do that research yourself. 

Still cautious as hell but today’s action was definitely an improvement.  It has NOT been an easy trading environment for me lately. 

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.  

Grueling day…….
Qs – Relative Strength; opened inside yesterday’s range and quickly moved to test recent swing highs.  Around lunch time Qs broke out and above prior high and successfully held on on subsequent test. (AAPL, BIDU and GOOG were strong today)
IWM – Relative Weak,  Open in mid of prior day’s range, quickly proceeded  to test previous high but was unsuccessful; IWM were unable to hold above 200MA on 5min and dropped briefly below yesterday’s lows; Closed back in Mid Range. 
SPY – Range trade but overall performance was soft; dropped below overnight range three times but eventually closed back inside. 
USD Strong
Oil Neutral
10 YR Up

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. 

Grueling day…….
Qs – Relative Strength; opened inside yesterday’s range and quickly moved to test recent swing highs.  Around lunch time Qs broke out and above prior high and successfully held on on subsequent test. (AAPL, BIDU and GOOG were strong today)
IWM – Relative Weak,  Open in mid of prior day’s range, quickly proceeded  to test previous high but was unsuccessful; IWM were unable to hold above 200MA on 5min and dropped briefly below yesterday’s lows; Closed back in Mid Range. 
SPY – Range trade but overall performance was soft; dropped below overnight range three times but eventually closed back inside. 
USD Strong
Oil Neutral
10 YR Up

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. 

Before it was abundantly clear we’d be having an powerful Trending Day…..(Tech, Materials were lagging and NASDAQ Internals were less convincing), I wasn’t exactly sure what was taking place during the 10:00 CST period.  There was a lot of volume transacting and I initially suspected that level may act as resistance (see the last chart of this post for additional reasoning). Once the rest of the market caught up with the S&P and Russell 2K, the picture became a bit more clear.

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….

Healthy Internals & Sentiment ( I assume spurred by short covering) made today difficult to have a short bias (even though I caught myself whispering a few times, “wtf?”).  While I don’t watch T.V. (when trading), a trader friend mentioned Obama was speaking during the morning session.  I tend to stay out of these conversations but judging how screwy the morning structure was, I’m more apt to subscribe to my buddy’s suspicions.