Thursday, July 17, 2008

Planning and Trading a PreMarket Bias

9:08am OK, going to take advantage of this blog to discipline myself with holding a pre-market short. Shorted 30 ES at average of 51.50 pre-market and plan on covers at 44 & 45 OR by 10:30am ET. Will let that stand on its own and wiggle as a mid-term intraday swing trade. Managing risk with very modest size. Will also establish separate short positions on any clear confirmation or further climb. Looks like a major gap & trap after yesterday's earnings short covering rally. Will short any approach to 58 with stops above 60. ES 50 points off Tuesday's low and nothing goes straight up. Stayed away from shorting yesterday but timing is now. Philly Fed the remaining news item at 10m ET. Focusssssssss Don.

10:13am Whew! Underestimated the extent of the post-open run. I hate it when the market is obvious BUT the whole world sees it. Too early on shorting the approach to 59 (along with the rest of the market ... duh!!) and scrambled a bit, but the read was right on. Day after trend day is usually my favorite. Ironically, best profits came on buying the first dip heavy to 47s and exiting 49s. Taking a breath here. Will short any approach toward 56 or buy next hard dip and that may be it for day.

10:50am Nabbed that last dip in the 46s and already took it out. Want to buy and hold any further dip into the strong 15-min uptrend support.

11:02am Turning out to be a good rhythm today for 2 points scalps. Strong resistance to the north and strong support to the south. Very good volume and market pace today, and it was worth staying on the sidelines for much of yesterday.

11:26am Rebought on the nice dip to the low 40s and took it out on the rebound.

OK, here's my view of today's performance thus far. The early morning blog entry helped me get focused. I knew how the market was likely to act and had convictions to trade the expectation. Despite the fact that I was early on the initial short and had to improvise a bit, I feel good about my trading which for the most part was in lockstep with the market. And unlike the last two days, I feel my P&L thus far is a fair representation of my trading decisions. [Up $25K for the morning.]

At this point, I'm likely done for the day. No reason to overtrade (is there ever Don??) Nice to see a pre-market plan work!

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