Wednesday, August 27, 2008

Wednesday Notes - Breathing Room

11:48am Well, I'm not quite sure if it's me or the market, but one of us has better rhythm today. I sense it's probably a bit of both. Got off to a good DAX start for once that carried over into the U.S. session. Looks like that initial personal momentum from yesterday ... regardless of Tuesday's very modest score ... did provide some nice inertia.

It's interesting that the DAX pretty much trended down from its open (and I traded largely from the short side) while ES traded north out of the gates (been trading it from the long side) ... with the 8:30am economic data providing an interim turning point. That last sentence itself is highly enlightening in terms of both markets actually trending for more than 10 minutes, as well as my being in sync in both sessions thus far. 5- and 15-minute trend pullbacks provided good opportunity in both markets, and the VIX led the way on ES and kept me out of trying to short yesterday's highs.

So I seem to be on my game -- including making the mental transition between markets better than I often do (which could have been tough given today's two completely different paths) -- and have been dancing without stepping on anyone's feet. The result as been a decent $10K morning chip gain ... a stack I don't intend on risking much, if at all, for the rest of today's summer session. Put it this way: It would have to be Trip Aces and I'm heading out for a long lunch.

btw, I finally watched this year's World Poker Tour Finals last night in which Gus Hansen lost a heads-up battle ... after he had a 7-1 chip lead on the other guy! Made me immediately think of seeing many traders --- including me at times in years past -- steadily give back huge gains in such a way where an initial snowball turns into an avalanche. Granted, he lost as the result of a river suck-out -- and had accumulated much of his own stack earlier in the session by sucking out himself several times -- yet it did seem he played poorly at times and left himself vulnerable to that single unlucky instance that did him in. That's why I get so concerned with even a couple of draw or "treading water" days in a row. Momentum can be such a double-edged sword.

12:12pm Putting lunch plans on hold ... VIX plummeting & ES surging. Should be a decent overextension or pullback coming.

First card is an Ace ... looking for second card.

1:14pm Been stealing some blinds in terms of some light $0.50 - $0.75 liquidity-providing scalps both ways on the climb. Pace continues to feel good. Last trade if it shows up will likely be fading a further exhaustion move north or steep retrace south. Have to be extremes though to carve out 1-2 point profit potential ... everything else is tick scalps up here.

Trading still feeling very natural. Stroke by stroke, I seem to be gaining on the French guy. At least the water isn't hitting me in the face now. Keeping strokes short and swift. VIX gets the award for the indicator of the day.

Guess no lunch for me today ... a good reminder that the market dictates breaks, vacations, etc. As Napoleon Hill once said, success means being willing to do what the vast majority of others won't do. At least I think it was Hill.

1:32pm Come on, one more major thrust down to shake out the late-to-the-game longs.

1:46pm Looks like I let that bus pass. Got dealt A-J unsuited and wanted a high pair. Oh well, next deal. I did catch a piece of that first pullback for a few ticks, but wanted one more thrust for entry safety. Market a total coin flip up here now ... lousy probability.

Heading into afternoon gain preservation mode. Day's chip count +$14K and feeling slightly better about my trading vs. recent days.

1:52pm Hmmmm ... this might get tempting on a further plunge. Shhhh ... be vewwy vewwy qwwwiet. Don't do anything stupid Don. ES has to be in the 76-77 range for a decent low-risk long scalp attempt.

2:00pm Nibbled on short-side ... noticed 3LB never went long on last climb and there's room to fall to longer-term intraday supports. Currently short from 82.25 small size, covered partial already, and holding teeny size now. Sitting at 79.75 and on free roll for the rest now.

2:04pm Good read. Covered more 80.50. Size very small though ... getting tired given the early AM DAX trading and market also approaching another "on-the-fence" mode.

2:07pm Flattened final at 81.25 and calling it a day ... still room to drop, but clearly losing focus and stamina. Final chip count +$15K, with a little under 1/3 coming from the DAX. I'll leave the next few relay legs to the rest of the team. At least we have some P&L breathing room for the moment. Any run into the close will set up Thursday A.M.

2:14pm Funny that ES just ticked 79.75. I guess that gives me something to improve on for tomorrow. Not a bad thing at all.

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