Tuesday, August 19, 2008

Tuesday Notes - Any Green is Good

11:13am As I suspected in my reply to one of the comments yesterday, much of the tradable post-trend oscillation action unfortunately happened in the last hour yesterday with ES climbing 8 points off its low in the last 25 minutes, and thus far the optimal pullback toward key 15-min downtrend supports (my term for trendlines supporting down moves instead of "resistance") occurred at yesterday's close and again in the Globex session. As a result, I've been trading enough to keep the blood flowing, but that's about it. Tried a few longs looking for bungee snapbacks, but they never materialized and I'm essentially flat on the day with small winners offset by small scratches.

Keeping an eye on the next consolidation break which I sense may be down given the morning buyers' strike, uptrending VIX, and TICK which has been nowhere close to sustaining a + reading, but darn tough to short a market that's short-term oversold, and entering on trend extension signals on the day after a strong trend is typically a road to ruin. Gonna let the market make the next move.

11:32am Still no conviction at this end ... this too shall pass. Focusing on my non-market obligations but keeping an occasional eye on the screen.

1:00pm Watching the slow climb. Prefer a stronger squeeze surge to short into, although action thus far has been at a snail's pace both ways. As I've said before, market "pace" is as important to me -- if not more so -- than technical setups. This has been like watching the "Slowsky" turtles in those Comcast commercials. Been paper trading a bit on the climb, but no conviction to put capital on the line yet. Amazing how paper trading fills are never a problem. 15-min trend still down for now.

1:38pm No rhythm at all to today's pace, making it difficult to enter cleanly.

1:41pm OK, I'll bite ... shorted 70.25 stop 71.50 going for lower high ... small size cuz of past patterns (more on that thought later). Never mind ... scratched 70.75.

1:46pm Shaked and baked ... that wascilly wabbit. Everyone wanted the same thing ... hate when that happens. Next slight pop should be better entry.

1:48pm Reentered short 1270 ... that TICK pop was pathetic.

1:53pm Best cover so far 1269 ... heck, a point in this market is like Filet. Too funny. Sitting at 68.25 on remaining cover.

1:56pm Ding, ding, ding. Flat. Might finally get a decent scalper's pace going if this keeps moving ... I don't care which way, just move!

2:05pm Caught some of the overextension down by grabbing a wholesale long for a few ticks. Keeping everything tight in terms of profit expectation and size for now. Longer term "investors" not looking good now ... lots of overhead resistance in the 1280s and charts looking worse vs. early August even at the same price:

They can of course bust through it, but it will take some work.

btw, that earlier short shake-and-bake sequence was very typical of this summer's rhythm. Traders entering anticipating lower highs or higher lows and using prior highs/lows as stops have been getting stopped right before a whipsaw turn. If you go back and look at the short-term summer ES charts, you'll see that pattern time and time again. I was aware of that pattern going into the first entry, which is why I scratched before my stop was hit sensing it might happen again ... saved a point or so by doing that.

Not too interested in much more sardine can trading though. Lining up to be one of those days where any green is good. May take my paltry $900 (yes, that's two zeroes) to the bank today and let them run the market either way into the close ... which has also been an extremely common summer pattern.

Actually feeling pretty good about not overtrading today. Tough to do much with 5-8 offsuit, and you can't bluff the market.

2:35pm zzzzzzzz

2:42pm 5-min attempting another leg down, but no conviction in high probability entry points as larger timeframes are stretched.

3:07pm Got a small nibble shorting that last reaction up, but keeping it tight still.

3:48pm Quite the closing spin-cycle. Closed barely green for a sandwich or two, but any green may be good on a day like this.


Unknown said...

Thanks for the chart late yesterday.

You did a great job staying green today, even if barely. I did overtrade trying to get some excitement, and was left without my sandwich.

So I will sleep hungry tonight to learn my lesson and wait my turn.

Don Miller said...

It certainly wasn't a banner day P&L-wise, but I really only do care about 12/31. There will of course be many days when the market doesn't cooperate, as well as when the market DOES but I don't perform well. Those days easily fix into the mix of 250 trading days a year.

The killer would be performing poorly when the market doesn't cooperate, and I guess I stayed away from that pretty well today.

The trick will be taking the foot off the brake and hitting the accelerator when the time is right ... which can be downright tough when the foot has fallen asleep on the brake.

Much more work to do.

aapl said...

i remember when you "if my memory is correct Beaver" were trading with ral,gio etc...

i recently stumbled upon your blog via Dr. Brett Steenbarger blog, and even though i don't trade futures i still enjoy reading your post...

Does your blog update during the day or is it just updated all at once end of day...

thanks, and god bless,

charlotte, n.c.

Don Miller said...

Hi Duane ... it's indeed been a long time.

Since the blog essentially reflects my personal journal, I usually scribble in an unposted draft during the day, and then post it at the end of each day. Sometimes I post an extra thought or two at night if something is weighing on my mind, and I plan on continuing to do one or two weekend entries.

And since it's my personal diary, sometimes the weekday entries may be brief and a bit fragmented. It's been a useful tool for me thus far ... although the final verdict won't be in until the end of the year when I see if my performance improved or decreased since I started it. Until then, it remains somewhat of an experiment.

Take care.