Technical Index Trading & Analysis

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This topic contains 459 replies, has 23 voices, and was last updated by  RS2OOO 1 year, 12 months ago.

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  • #3435

    RS2OOO
    Keymaster

    DOW possible resistance here at 17,704

    I entered long on Sunday night at 17,119 and just closed at 17,695 for +576 pts.

    Now trying a short from 17,700

    #3436

    RS2OOO
    Keymaster

    Don’t mess with penny stocks in either direction….. “Devastated” Trader Crushed By Soaring Biotech

    #3437

    RS2OOO
    Keymaster

    There has never previously been more than 10 consecutive red/green alternate closes on SPX before.

    Today is the 10th alternate cash close (which was red), so based on history, the probability of a green close tomorrow is zero.

    Also the 1st trading day of December has been bearish in recent years.

    Personally I’ve no idea what tomorrows direction will be, but for some reason I’m seeing a bullish bias but probably best to see how supportive the hourly 200 MA is before making any trading decisions.

    #3438

    RS2OOO
    Keymaster

    Now 11 consecutive alternate red/green U.S cash closes. A new record.

    I’m currently holding a small long from 17,832 so hoping bulls will break the cycle with another green close tomorrow, though I’ll probably consider covering the position before FOMC, or at least having a sensible stop loss.

    The 17,700 short I took on 18th Nov which I forgot to update on, I closed it the following day on the opening bell for break-even.

    #3439

    bracke
    Participant

    Good day RS2000

    I trust you closed your long or at least were not too badly singed.

    We trade in dangerous times.

    #3440

    RS2OOO
    Keymaster

    Hi Bracke,

    Good to see some other life on here!

    Agree that times seem dangerous, even though the charts don’t look dangerous at first glance.

    I’ve had a few, well, a lot of trades that don’t even go a single pip in my favour to cover the spread cost before suddenly being 100+ points under water!

    However, price is overlapping itself considerably so despite something looking really bad initially, most trades I have managed to hold out to eventually take breakeven or a small loss or a small gain.

    It does seem the key to surviving this is small affordable stakes (learnt that the hard way mind).

    I covered a USD:JPY short at the very highest pip it went to before selling off in mid November, and I closed a NZD:JPY long at the lowest pip it went to (18th Nov) before it rallied hard. Sometimes I wonder, how is this even possible to nail the highest or lowest pip before a major trend change against you!

    As for that DOW long, I sat through it yesterday (it went to -135 points), then couldn’t believe it when it showed a profit this morning so put the stop at b/e which was eventually taken out.

    I shorted DOW earlier today at 17,803 with 120 point stop. It was only a 50p position. Literally got home 20 minutes ago and closed it at 17,443 to take +360 points profit! I was half expecting to see it still around the breakeven level, couldn’t believe it when I saw almost £200 profit and had to double check it really was a 50p stake!

    #3442

    RS2OOO
    Keymaster

    Really don’t know what to make of today. Seen a few comments today about people wanting to throw the towel in.

    I shorted what I believed to be a strong technical confluence… Fib levels (61.8 on DOW hourly), 100 / 200 / 50 MA’s and EMA’s converging or likely resistance on most time frames, very poor breadth throughout the early rally, and with continued lower highs yet price being 300 points off yesterday’s low, and MACD hadn’t produced positive divergence on any time frame prior to the rally, everything was shouting out for a short.

    I literally shorted 10 seconds before Draghi spoke, but he only reiterated what he said yesterday so with the initial spike in Indices I checked EUR:USD and its reaction was very mild (yet Draghi’s speech was aimed at the Euro), so with stops above yesterday’s high I left the trade to work.

    In the end I couldn’t bear to hold on any longer and closed for a fair loss towards the day’s high in the last hour.

    Bulls haven’t been able to make 2 consecutive green closes in almost 3 Weeks so its hard to imagine bears are over, will have to wait and see on Monday.

    Whatever the outcome, days like today make a mockery out of the use of T.A.

    I think Cobra summed it up perfectly with this statement:

    “I’m speechless, cannot help thinking of throwing all TA books, theories, everything I learnt and once firmly believed away, because it seems nothing really matters, trading requires nothing but imagination, BULL imagination.”

    #3443

    bracke
    Participant

    Good day RS2000

    I do ponder if the market volatility/lack of TA is being driven by HFT. It appears that if you have the muscle (money) it is possible to drive the market which ever way desired. No need to buy or sell the shares just trade the derivatives by means of HFT.

    #3444

    RS2OOO
    Keymaster

    JPM Head Quant warns of the following surrounding December 16th FOMC:

    This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. Clients are net long these puts and will likely hold onto them through the event and until expiry. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market.

    What does this mean? Considering that the bulk of the puts have been layered by the program traders themselves, including CTA trend-followers, and since the vol surface of the market will be well-known to everyone in advance, there is a very high probability the implied “stop loss” level will be triggered, and the market could trade to a level equivalent to the strike price, somewhere in the 1,800 area, or nearly 200 points below current levels.

    Whatever your position…. be careful!

    #3445

    bracke
    Participant

    Thanks for your previous post RS2000. Interesting.

    #3446

    RS2OOO
    Keymaster

    Stats show 78% to 81% chance of a red close tomorrow with high probability, however, US Cash indices have gone 19 days without 2 consecutive green daily closes which is a new record.

    I think tomorrow will close green to make it 2 consecutive up days. I think we’ll see at least 17,480 at some point tomorrow.

    Based on all the stats I’d guess that both longs and shorts held over from today will see a profit in the near future.

    #3447

    RS2OOO
    Keymaster

    This is just your typical analyst rubbish extrapolating an existing trend, so for interest only:

    SocGen say that gold will be the casualty of the Fed hiking rates and will decline to USD 950/ton by the end of next year as the Fed tightens.

    #3448

    RS2OOO
    Keymaster

    Just closed a DOW long from 17,256 at 17,603 for +347 points.

    That trade was a tough one to enter and hold as technicals looked pretty rough but the Santa rally has surprised me so many times in the past I decided to just go for it.

    Yesterday morning (22nd Dec) at 09:45 we got MACD hidden divergence on the 5 minute time frame and so many DOW rallies have been produced from hidden divergence lately I just decided to stick with it.

    All in all, a nice finish to December following such a difficult start to the Month – the Whipsaw in the days either side of FOMC were really difficult to trade.

    If anyone is still logging in here to have a look, then happy Christmas to you and your families.

    #3449

    bracke
    Participant

    Good day RS2000

    That was an excellent DOW trade you made.

    I wish you a Happy Christmas and a Prosperous New Year.

    #3450

    RS2OOO
    Keymaster

    Took another long last night at 17,505 (100 points lower than where I exited the last long) and just closed at 17,660 for +155 pts.

    Its been a while since having 2 big wins so close together.

    This was also a small stake – easier to sleep at night, but the profits still were still more than my large stake day trades/scalps, but with the difference of being able to sleep at night!

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