Afterhours Trade : 2-Wave Buy
just 'cuz trading only during regular market hours would not make me enough of an addict.....
just 'cuz trading only during regular market hours would not make me enough of an addict.....
Hey gang... I am gone for the holiday weekend, so enjoy the extended weekend and the lesson below and you'll hear from me again on Monday evening!



Here are gaps I am watching for continuation patterns in the direction of the gap into the open.
Good morning! The market was substantially stronger on Wednesday than I had been expecting heading into the session. While the volume had been light on Tuesday, suggesting that the market would have a difficult time breaking the previous lows, I was still looking for things to remain weaker ahead of the holiday weekend. Once the session began, however, very little weakness manifested itself.



Good morning! After rolling over in Monday's session with the three indices each forming 60 minute short patterns, the selling accelerated into the next day. As I mentioned yesterday, the S&P 500 ($SPX) had fallen on Monday morning and then had a slightly lower high in the afternoon with a base along the intraday lows. It triggered a 60 minute short pattern shortly before the close. The Dow Jones Industrial Average ($DJI) and Nasdaq Composite ($COMPX) had also formed reversal patterns with double tops on the 60 minute charts. The significance was the slower momentum and volume into the second high as compared to the first highs which took place on Friday.



hey gang.... going to be an aunt again and it's another girl! looks like my brother will continue to be outnumbered...
Good morning! The market was extremely choppy on Monday. After trending strongly to end the week, the indices were all over the place at the beginning of the new one. The market opened slightly lower into the lower end of Friday's uptrend channel and the Nasdaq pulled higher to attempt to close the gap, while the S&P 500 could not shake the open and fell into congestion right away. At 10:00 ET this uninspiring trading became a bit more lively with the release of the housing data. The number of unsold homes hit a 16-year high last month and within a few minutes the market was making new intraday lows.



Good morning! The market experienced its strongest uptrend day in a number of months on Friday, climbing throughout the session in a narrow trend channel with the 5 minute 20 simple moving average serving as support throughout the session. The day began rather unexceptionally, but at 10:00 ET the July home sales data was released and the indices surged to new intraday highs thanks to an expected jump in sales last month. A number of housing-related stocks have been showing downside exhaustion the past couple of weeks and while things still don't look very peachy for the likes of Countrywide Financial (CFC) and a number of others, but I think that a lot of folks will be doing a bit of dumpster diving at these levels in over the next few weeks. Home price data on Tuesday with the Case-Shiller index and then on Friday from the Office of Federal Housing Enterprise Oversight will be watched by many closely monitoring this sector.



Good day! The market opened strongly higher again on Thursday, but it's been a tough road for the bulls. Despite the strong open, the market has been moving upward for a number of days and after such a sharp decline just a week ago, it's been hard to maintain strong upside momentum. While the market has given us the gains we were looking for, on Thursday they failed to hold onto those gains. Right away after the gap higher things began to sell off.



Good day! Well, we got our additional upside finally on Wednesday! That was the good news and those who have been holding longs all week were no doubt very happy with the day. Unfortunately, this upside initially came in the form of an extreme gap in the indices. As I've discussed numerous times in the past, extreme gaps in the indices have a VERY difficult time holding the gaps, let alone continuing in the direction of the day. Instead, they prefer to close the gap zone on the day of the gap itself.



I know, I know.... Why would I trade something like SLG with the spread that it has? Sometimes it's about 20 cents. That did cause me to pause. I could have gotten an entry easily at $114.10 but instead got $114.24 by waiting for a little more confirmation. Basically on a trade like this I constantly have my hand on the trigger button so that when things start to change I can bail quickly. I did figure I would have about 10 cents slippage, but the reward compared to the risk was still greater since this setup will nearly always retrace at least back into the zone of the morning highs. I used a target of the $115 zone since I figured that would be the easiest, although I think there is room it can move a bit more as the day progresses. I put my order on the books to take gains nearly right after I got in it at $114.94 to best guarantee that I would get filled since on a stock that does have a wide spread it might only trade at the resistance a tick or two and then fall. It does have a high shown of $115.15 on this chart but that was only one tick with all others at $115 or lower....

One of my favorite gap setups... Two wave pullback then continuation.... Notice the light volume on the second drop... No real selling!
Good day! It was a mixed session for the market on Tuesday. While I managed to find some great setups in individual stocks such as Dicks Sporting Goods Inc. (DKS), the overall market had a tough time making any headway. Even though the market had some core setups in terms of the 5 and 15 minute time frames as you can see on the charts shown below, the main problem was that in forming and following through on the setups there was a great deal of chop and overlap from bar to bar. This would have made it easier for many to time entries and exit incorrectly and get flushed out on minor moves before the larger target levels hit. Although I saw some nice setups in the afternoon that would have worked out quite well, I ended up staying away from them for this very reason. I have not yet decided if that was a good or bad choice on my part since this time it obviously cost me a lot!



Good day! The market did things a bit backwards on Monday as compared to what I had been expecting going into the day. I was expecting upside in the morning and then a late day reversal. Instead the market displayed greater weakness throughout the morning and turned around into highs in the afternoon. All said, however, it was still the choppier type of indecisive trading that we HAD been looking for. This was particularly the case throughout the first half of the day.



Good day! I know what you are saying... The market closed quite a bit higher on Friday, with gains of 233.30 points (+1.8%) in the Dow Jones Ind. Average ($DJI), 34.67 points (+2.5%) in the S&P 500 ($SPX), and 53.96 (+2.2%) in the Nasdaq Composite ($COMPX). Given that the highs of the day on Friday were shortly after the open following the Fed's surprise rate cuts of 50 basis points, why would I then say that the move may have had very little effect upon the market? It seems like a simple case of cause and effect. I disagree.



Good day! I have one word to describe Thursday's session: Yikes! Ok, so we were looking for more downside ahead of the weekend, and we weren't looking for support until the price congestion from late last year and early this year hit. Nevertheless, seeing it follow-through with our bias and the wickedly volatile trading that accompanied it was quite something!



· CAI up 1.7% - this Q comes in better....they reit F08 outlook
· CRM - this Q comes in better, raise F08 outlook.....the low-end of FQ3 is below Street
· TMA Price Target to $7 from $19 at DB
· INTC - coverage transferred at CSFB and stock upgraded from underperform to outperform
· NTAP up 5.4% - this Q inline w/warning...the Oct Q outlook is "better", but prob. inline
· AMGN announces restructuring on lower Aranesp revs -- cuts '07 EPS view and '07-08 CapEx, reduces workforce by 12-14%
· VITL Vital Signs Buys Fluid Warming Technology
· BZH up 4.5%, files 8K
· KOSN up 3.7%, files $75M mixed shelf
· AMFI up 2.8%, names Donald Wilson Pres/COO
· USTR up 2.6%, ups stock repurchase authorization by $200M
· HOC up 2.6%, Navajo refinery unit back online
· CGNX dn 7.7% Cognex Tops Q2 Estimates But Sees Q3 Below Forecasts
· LDG Longs Drug Tops With EPS, Revenue Shy as Guidance Straddles
· NTAP Network Appliance Tops Q1 Estimates, Sees Q2 in Line to Above, OKs Buyback MN Sets $50 Mln Stock Repurchase Program
· PETM PetSmart Beats on Earnings, Meets on Revs, Sets Guidance MN 08/15 16:19
· CPWR says Won't Take On Debt to Buy Back Shares Due to Mkt Condition
· NOIZ Micronetics' Q1 Results Down Vs Yr Ago
· DITC Ditech Networks Misses Q1 EPS Estimate, Sales Meet, Q2 Sales Seen In Line
· CRM Salesforce.com Down 3%, Reports Improved Q2 But Updated Guidance is Mixed
· COP Conoco Phillips Unit to Pay U.S, $97.5 mln for Fraudulent Underpayment
· UTSI dn 1.8%, gets Nasdaq Notice Due to Late 10Q Filing, Requests Hearing
· LMRA --Lumera CEO Resigns, Names President and Interim CEO \
· PLAB Photronics Q3 Results Down vs. Year Ago Levels, but Beat Estimates
· SPWR SunPower Inks Long-Term Supply Pact with SMA Technologie AG –
· CXM --Cardium Therapeutics Files Up to $50 Mln Shelf Registration With SEC
· IMOS up 1.3% - ChipMOS Firmer - Q2 EPS In Line, Guides for Revenue to Miss
Good day! The market remained under pressure on Wednesday as heavy late-day selling once again bombarded the bulls. The Dow ($DJI) closed under the 13,000 level for the first time since April after losing 167.45 points. It ended the session at 12,861 with a loss of 1.3%. The S&P 500 ($SPX) lost 19.84 points (1.4%), and closed at 1,406.7. The Nasdaq Composite ($COMPX) ended the day lower by 40.29 points (-1.6%), at 2,458.8. One of the top losers was Countrywide Financial (CFC), which fell 3.17 points, or 13%, after it was downgraded from buy to sell status by Merrill Lynch. Another stock which has been extremely hard-hit by the fiasco with sub-prime mortgages was KKR Financial Holdings (KFN). It fell another 31.2% on Wednesday after announcing the sale of $5.1 billion in residential mortgage loans and suffering a downgrade from Lehman.



Good day! The carnage continued on Tuesday with a nice bearish base out of the open. The market had pulled to the lower end of the trading range on Monday before it closed, so the fact that the indices stuck to that level to begin the day on Tuesday was not a great sign. I once again had a difficult time locating much for decent momentum plays out of the open, but Tuesday did follow through with the promise of being a more active session than the previous one had been.


Hey gang.... Here is a variation of that FSLR pattern but in the NQ....

Hey gang,



Good day! Market volatility has been a huge concern for traders and investors alike these past several weeks and it increased even more on Friday. A number of central banks from around the globe began increasing liquidity on Thursday by injecting billions of dollars worth of funds into the banking systems to attempt to offset some of the effect of the subprime-credit fiasco. This was stepped up on Friday, but the lasting impact of such a move has yet to be seen. In an effort to curtail further excesses in borrowing, the European Central Bank, which has provided the largest infusion of funds, appears to be set on raising interest rates in September.



Monday:
Monday, August 13, 2007

A trading journal is probably the most important, and most often neglected, tool in determining your success or failure in the market. Do you keep a trading journal? If so, do you've feel you've actually learned something from it?
Labels: trade journal, trade logs, trading journal, trading logs
Well, this is a really old article I wrote back when the Pattern Day Trader Rules were first introduced. I'm reposting it now, however, because I still get a lot of questions from newer traders on what exactly this rule is and how does it affect them. Namely, putting it to them in straight terms instead of with some legal mumbo jumbo... So, here it is:
Labels: Pattern Day Trader, PDT Rule



I mentioned in my previous post that one of my equities trades was MSA. Well, while it ended up being a nice trade, it was not nearly as nice as it should have been! I entered MSA thinking that at the very LEAST it was going to get to $58. I was a little late on the entry over $57 because I pulled up the stock right as the setup was triggering, but I had an extremely tight stop due to the narrow range it was moving out of. On this type of setup the larger target is a few ticks under the original high, which meant $59, with initial resistance at $58 because it would be the smaller equal move and whole number resistance.
Ok... So my friend in here for the week for vacation, but I still can't just leave the market! I know... sad.... very sad.... Anyway.... I've been doing drive-by trading... popping my head in, seeing a setup, grabbing it, then taking off again. I'm three for three on excellent setups. The only futures trades I've done was the NQ a few minutes ago. (Other two trades were EXPE and MSA this morning.) The NQ is as follows:
Good day! Volatility in the market remained high in Wednesday's session as the major indices continued to react to the support levels which have been hitting over the past week or so. This was in line with our expectations heading into the session. Fortunately, the continuation of the move off support did lead to some very nice intraday setups in individual stocks, even though the indices were a bit more difficult to follow.



Good day! The market managed to close modestly higher on Tuesday after a slow session heading into the day's FOMC statement and large whip-saw action following the announcement. All-in-all it was a rather typical Fed day. The morning began with a small downside gap into the open, but the 5 minute 20 simple moving average held it and the indices crept higher until the gap zone had closed. This took place shortly after 10:00 ET and the indices then fell back and sideways as the volume began to dry up. This made it difficult to do much with the index futures since choppy trading set in and the upcoming Fed announcement meant that the closer the day came to that announcement, the higher the risk would become.



I thought you guys might love this chart comparison on two trades in the NQ on different time frames... A favorite pattern of mine which I also showed in earlier posts located at:
Good day! Monday was an interesting day in the market. The lack of bias that was showing heading into the open continued early on in the session. A slight upside gap quickly closed, but after finding support at Friday's lows in all three of the major indices, as well as Wednesday's lows in the Nasdaq, the momentum began to change and a stronger intraday bias began to emerge. From 10:00 ET into 11:00 ET the market pushed back into the lows, but refused to let go of the 5 minute 20 simple moving average resistance levels. It just slid lower with a great deal of choppy trading and on lighter volume than the first decline of the day. This tug-of-war eventually wore out the bears, which had been working hard since Friday to push for stronger tests of daily support. Soon after 11:00 ET they simply gave up and let go. The market soared.




Monday, August 6, 2007
Monday:
Good day! Well... We knew it wasn't going to an easy correction off the daily support! This certainly proved the case with Friday's session! The day essentially confirmed in my book that this time around the market is not going to be able to make a recovery like it did with February's decline. My weekend scans also make me wary of buying anything other than very short term positions, meaning setups that take place on a 60 minute time frame or smaller.



I did a great deal of scanning this weekend, and nearly every one of the S&P 500 looks lower on the weekly and monthly time frames as the year continues. I've had a very difficult time in recent months in finding decent setups on the larger time frames for position trades and longer term buys and very few of the stocks I scanned through this weekend are even close to what I would consider to be an ideal buy. In fact, not a single one of them was one I would deem to be a low risk setup.
I love how patterns repeat themselves! Check out trade number 2! It's the premarket one, but instead of on the 1 minute, it's on the 5 minute... same pattern though!
Ok, so I usually don't trade the premarket at all, but today I saw a setup so perfect that I could not pass it up, and it was kind enough to reward my by buying me breakfast.... (ok... a little more than breakfast....)
Good day! Market volume remained high on Thursday after last week's steep selloff, but the indices continued to try to correct from the daily support levels which hit late last week in the S&P 500 and Dow Jones Industrial Average. The market resumed Wednesday's late day surge right away into the open, moving higher for the first 15 minute of the day. When the 9:45 ET reversal period hit, however, the indices began to round off and correct off the extreme momentum move on the 15 minute time frame. The extent of the 15 minute move meant that the indices would have a very difficult time resuming the buying without a correction taking place on the larger intraday time frames. The momentum of the move also meant that such a correction would tend to be more gradual overall than the rally, which created a strong chance for a trading range throughout the session on Thursday. This is, of course, what we had been expecting heading into the day, so at this point not a lot had changed in terms of the day's outlook.



Good day! I've been out of the market for most of this week, but in the interim the indices have continued to correct along the support zone which hit late last week. The S&P 500 ($SPX) and Dow Jones Industrial Average ($DJI), which had experienced the greatest selling last week, have been holding those lows the most diligently. The Nasdaq Composite ($COMPX) had taken back less of its gains from the last couple of months last week and on Tuesday it broke through the 50 day simple moving average support and nearly hit its 100 day sma on Wednesday.

