Thursday, August 21, 2008

Thursday Notes - Range, Range, Break

1:44pm Some day, they're going to take this market out of the current logjam range ... and the break will be hard. That much is certain. As for the when, how (don't care), why (don't care) ... ok, as for the "when", who knows, although it will likely be when everyone has been sufficiently lulled to sleep. Been nibbling on small 1-minute attempts to bust out of the longer term range much of the day, with one early stop, and most other sequences doing OK as I've been dumping the majority of my position as we approach the range tops and then typically cutting the rest loose on divergences or a move back down. That way, I lock in something while keeping a small position on in case "she blows" ... even if it would just be a moral victory with a very small size.

Have only traded 360 x 2 ES and 38 x 2 DAX contracts ... teeny sums for me ... with much of ES on the 1pm-1:30pm climb and attempted range break.

Not too much to complain about here and am satisfied with the very modest $4K take, although I could have been more aggressive at the open on the early move up as I instead opted to see more cards. I did have a decent DAX sequence and captured the following charts and DOME at the time:


You can see the attempted breakdown and 3LB being short, so I entered on the pullback and took most of it out on the drop ... using the same ES scaling out strategy as I mentioned above given the risk that we'd remain rangebound. The DOME shows the 6264 entry price and the remaining contract I was positioning to cover below the market. Turns out the market never traded down there and I had to dump the remaining piece at the entry price. Yet it's another good example of how I'm trying to trade this summer's recent rangebound action ... looking for mini-trends within the larger range. It's certainly less profitable than buying the range bottom and selling the tops, but my brain has never worked that way as I prefer to view the market from a trend perspective ... even if the trend is microscopic.

2:27pm Pop goes the weasal. Caught some of that using the same strategy and this time the VIX pointed the way:


Looking for the first strong pullback. Might be a while if at all since I expect this pop will be strong. Range bound traders now stuck.

3:02pm Nice ... nailed 78.75 entry on the retrace ... taking it out on the pop. Clean trade and good market pace. Crap shoot now ... if they run the close, will gear up for A.M. after trend mode. One eye on clock and one eye on gain preservation. 3LB turned south on that last hard retrace, so not interested in riding any further wave.



3:09pm Good decision for now ... market down 2 points off my exit. It might hold here and gear up for another move, but it will go without me as I'm now looking to the morning. $7K now in pocket. I actually thought that pop would be stronger given the likely # of stuck range-trading shorts. There's still time though. 5-min trend now in play for the first time in a while.

3:14pm That's more what I expected ... fast three-point surge. Caught the first move ... sat out the second. If 3LB had held, I would have considered a long on the deep retrace. Hard 2+ move back down now. In the words of Devo ... "Whip it ... Whip it Good". Too tired here now with 40 mins to go. Calling it a day and will let others have at it. OK day, but I need to find something I didn't like about it as the week's not over yet.

1 comment:

Duane said...

hey don...

great play by play today...

god bless,

Duane