YM, ES and DJIA Analysis

[james_gsx]

I guess I should have better explained the range bound stuff that screws me up.

For example here we are stuck between 2-3 ES points. Granted there is money to be made and I should have shortened my time frame to see better setups. I just find I get chopped up in these situations. But I definitely argue that in a trend day and you go the wrong way you're out.

[james_gsx]

Looking at the dow I still see resistance at the 50 SMA. I would be cautious of going long now even after todays candle just because of the last 3 times we closed around the 50 SMA the next day produced large down days. I guess I'm just not experienced enough to trade this kind of market just yet.

I really think seeing a weekly close will clear up a lot of things.

[brownsfan019]

James,
I see what you are saying.

Here's my take on your chart:




I assume your lines are pivot or some support levels. Working off those assumptions, here's what I see:
1) Nice spinning top as you annotated.
2) Hammer that failed.
3) Engulfing that worked well.
4) Hammer with small profit.
5) Spinning top.
6) Engulfing.
7) Shooting star.

Now here's what I also see about exits - if you wait for a reversal, trade #1 and #3 provide some very nice profits. Trades #2, #5, #6, #7 while all are losses, they appear to be small, esp compared to the winners on #1 and #3. Trade #4 was a scratch for sake of discussion.

As you can see, you could literally go 2 for 7 (28.5% win rate) and make money.

If that doesn't get your attention, I don't know what will.

That's the power of candles - they are very good at calling the major moves, it's simply a matter of being in the trade. There are plenty of trades that don't go as planned, but that's irrelevant if you can psychologically handle it. In other words, looking at today's trades for your chart, there was about 15-20 pts in profit on the trades that worked. The 'losers' were small, but even at 2 pts each, that's -8. End result was at least +7 pts assuming worse case scenarios and fills. I don't know about you, but a +7 day will work for me with 7 trades. Not too shabby in my opinion.

PS
Did you get my email?

[james_gsx]

	Quote:	brownsfan019
	Here's a follow up observation - there's many theories out there of how to trade rollover day. But take a look at today - major bullish action. Why? Well, one idea could be that anyone long (like our trade here in the YM and ES) is that all the people that were long and needed to get long again, just bid this thing right up. It would be interesting to go back and research rollover days. There's only 4 per year, so the research could be pretty easy if you have the back data. I would just like to see what each of the rollover days looks like.

The other side to todays action could be all of the shorts needing to cover - then possibly go short again. I think that would be an assumption from the CFTC report dogpile posted. But again, I'm not sure.

[james_gsx]

Yeah I got the e-mail, sorry I haven't responded yet I was actually planning on doing that tonight lol

Now for all of those candles you pointed out, where would you have entered the trade? The close, the close of the confirmation? I can see an engulfing candle can cause a lot of emotion if you're not in the trade, meaning you'd want to jump in just to have it retrace and turn it into a hammer. But then theres the engulfing candles that immediately retrace the next candle. I guess that's just the risk you take?

[brownsfan019]

	Quote:	james_gsx
	Yeah I got the e-mail, sorry I haven't responded yet I was actually planning on doing that tonight lol Now for all of those candles you pointed out, where would you have entered the trade? The close, the close of the confirmation? I can see an engulfing candle can cause a lot of emotion if you're not in the trade, meaning you'd want to jump in just to have it retrace and turn it into a hammer. But then theres the engulfing candles that immediately retrace the next candle. I guess that's just the risk you take?

You got it - it's all about how much risk you want to take and how aggressive you want to be. At the very least, I would wait for the current candle to close. You can then enter a market order based on that. Personally, I would like to see confirmation on the next candle - so the entry may be 'worse' than a market order, but I think you'll see plenty of times where this will 'save' you from a loser.

[james_gsx]

Again, not a whole lot of action going on. We are trading in a range and theres a lot of action around the mean. Looks like there could be a spinning top on the YM. So what does that tell us? We might see the market drop a few hundred points then pop back up. Should see some confirmation this week as to where the market will head- I hope


Again though, if you can trade another commodity market right now then I would and wait for a better setup to occur here. I just don't see a lot happening for swing trades.

[james_gsx]

So far going into tomorrows FOMC meeting I still see a ton of disagreement between the bulls and the bears. On the ES and NQ we had a doji Friday followed by some confirmation today. But I'm really not sure if I'm missing something, maybe Brownsfan or someone else can point out something I may be missing?

The weekly charts look noisy too.

[brownsfan019]

	Quote:	brownsfan019
	#1 is our long we already discussed. Long at approx 13,220. #2 is a little tricky due to rollover today. So the chart is deceiving - it looks like there was a giant gap up and that's not the case. It's late, so if my math is wrong here, forgive me. Based on exiting our trade this morning due to rollover, here is what I see: Initial Entry of 13,220 on the U7 contract. We exit the U7 long this morning @ 9:30am EST @ 13,390. Profit from long = 170 pts = $850/contract (in trade 3 days). We then go over to the Z7 contract @ 9:30am and go long @ 13,490 if we want to maintain the long position into the new contract.

Well, James... let's see how are trade is developing here...




I'd say our long is in a comfortable profit position, thanks to our Fed.

At rollover, we went long @ 13,490 on the Z7 (after the 170 pt profit on the U7) and current price is approx 13,835 (+345 pts).

So now the question is HOW to manage this trade.

Here's what I see:

> We are at a possible resistance zone. I would sell some of the original 13,490 position here based on the WRB that closed at a resistance level. A retracement is likely this week.

> If we can stay above this level, the next resistance area looks to be at 14,000 - 14,100.

Hypothetically, if we dumped our entire long at the close today, we would have netted 515 pts (170 + 345) on this ONE simple, candlestick trade.

And for any doubters, most of my analysis here was done in REAL TIME that could have been traded on if you wanted. I'm not suggesting you blindly trade ANYTHING I write here, but I hope you see the power of looking at a daily, drawing your s/r levels based on candle 'clusters' and then look for a reason to trade. That's it.

Also, did you notice how that 50 SMA was once resistance and then became support? What a classic, simple TA trade - old support becomes new resistance and vice versa...

Is it really this simple?

You decide.

Good trading.

[brownsfan019]

And the ES chart...




Another nice trade here as well. I'll have to check the #'s out on this later. All I know is that a giant GREEN candle is great when you are LONG.