2nd excellent trade this week, short ES from 1203 Thursday, closing price today was1185.75. Love it. Exit plan on this trade will be keying on the upper channel trendline drawn from Thursday's high. A breach above that line will lead to a close of position. A note on channels and trendlines: they need to be adjusted as a move unfolds, the current channel placement might be somewhat different when the time comes for an exit. The V Stoch has curled up, but the experience from the bull market in Feb/Mar says to only use the V Stoch to ENTER a position that's in the direction of the primary trend, so at this point it will be ignored until such time as it moves above a reading of 75. Sell line moved back above Buy line today confirming the bear market.
On Elliott Wave, I've labeled the move down from Mon into Wed as "1" and Wed up into Thur as "2". They could also be "A" and "B' of a corrective formation. If this is in fact a correction to the rally from Feb 5 (or to the whole move from Mar '09), expectations would be for more than just a couple days of selling, so I favor the "1 - 2" count which implies a lot more to come. Either way we currently are in a 3rd or C wave, which typically are quite strong, and if true we should see a drop below Wednesday's lows at the very least.
The 5 minute V Stoch once again provided a great day trade entry at 12:55 PM CST when the V Stoch topped and ticked down. A short at that point covered at the close would have led to a gain of around 10 points. However, once again, it looks like day trades geared on this index need two things: a trade in the direction of the primary trend of that day, and a strong primary trend.
I'm not sure about the wave count.
ReplyDeleteBullish: we just finished 2 of 5. Next is a wave three heading up to (likely) new highs.
Bearish: we just finished subwave 1 of the powerful 3 down. Next should be a retrace up within the channel before the bear party really starts.
Either way, I think we head up before we go down again. The price of oil -- the moves over the last three days have been very bullish -- has me leaning towards the bull side at the moment.
I'm thinking 3rd wave down in a series of 1-2's. Thank you so much Apple, I havn't had a good week like this one in a very long time (+10K). using Etf's. I did close at the close. A little bounce Monday and I'm back in short. I do use stops and just move them quickly to protect at minimum a break even. There is always that possibility that this turns into a runaway down move.
ReplyDeletenice site
ReplyDelete"less is more" trading
bookmarked :)
Thanks hope to see more of you David, I primarily hang out @ OBB (Options Blackboard)
ReplyDeleteGlad you had a good week, I did as well. I didn't close Friday, I trade ES Futures which open with the currencies Sunday PM so don't have to worry a whole lot about an unfavorable Monday gap open, but I can see doing that if I were trading ETF's. Stops for me are strictly disaster protection, I try to keep them reasonably far away from current prices to avoid getting picked off, but like you I frequently adjust them. Yes this could turn into a runaway, Daneric's thoughts in this regard are interesting http://danericselliottwaves.blogspot.com/
ReplyDeleteI'm leaning bearish but not married to it, as usual I'll let the market dictate closing short ES and possibly going long if it's indicated. Daneric had some thoughts on RUT yesterday in which you may be interested http://danericselliottwaves.blogspot.com/
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