Thursday, September 4, 2008

Thursday Notes - In the Zone

11:00am OK, this is getting scary. Very much in rhythm today on ES and the volume is a welcome return. I have no clue what my P&L is and won't look until the next sequence is complete, which will either be a short of an approach toward 1260, or a buy of the next capitulation. Got a couple of two-pointers with decent size thus far, especially on the 10:42am third-push barf where I picked up ES on sale for 52.75, took it out on the approach toward 54.75, and then repeated it again at 10:50am picking it up at 52.25 - 52.75 on lesser size.

We could stay rangebound down here for a bit, but clear initial resistance at 1260 on any attempt back up today or tomorrow and I want that trade.

11:22pm Long ... best price 48.25 ... 45 contracts. Will let it float a bit. Target exits north of 50.

11:28am Flat all but 5 ... took 49.75 & 50.00 on most. Sitting at 50.75 on final.

11:31am What the hell, added at 49.00 ... should get north of 50 easy. If we break 50, should approach 52ish. Sitting at 50.75 and 51s for exits.

11:42am 50.75 exits taken out; back to small position and final exit sitting at 51.50. Definitely in the zone and feeling it today.

Man, an approach toward 1260 would be an absolute gift short.

11:49am Ding, ding, ding ... 51.50 taken out. Next entry a short on any surge north and high TICK reading.

11:54am Shorted 52.50 small size ... 5 min trend in play and should get one more push for 1-2 pts.

11:57am Ding, ding, ding ... covered final 50.75.


Noontime P&L check ... $23K on only 681 x 2 contracts. That's a ridiculous Dustin Pedroia type efficiency ratio. Get over it Don ... plenty of day left with ample opportunity.

12:05pm Any strong push north from here should be shortable ... problem is most everyone knows that and it could take a day or some really stupid shorts who forgot to cover in the gift plunge. ES rangebound now, but not leaving my workstation until 4:15:01!

12:22pm Got 1260ish marked on every relevant chart I can find. Don't want to lose sight of it. Trusting until broken (Click charts to enlarge.) ES in no-man's land though for now.

12:35pm Adapting my post-draw comeback mentality to the rest of the day, I need to view the PM trade as if my morning was a large draw (which it has been for many stuck longs).

Step up your focus Don and don't do any more damage by getting sloppy or forcing trades! Push yourself.

12:58pm VIX poised for another leg up and ES another leg down. Watching only for now. No buyers in sight. Looks like Sept will be a bear for long-term investors ... huge resistance to overcome.

1:42pm Little bit of a tricky bottoming attempt ... been dipping some toes in, scratching, re-entering, etc. Holding long core position from 42.00 looking for a PM squeeze attempt.

1:56pm Added long 43.75. 1 min 3LB is now long and this thing is stretched. Sensed exhaustion on last push down. Stop is 41.50 or a 3LB turn south. Room to squeeze hard if we can clear 45.

2:04pm Scratched for now 42.75.

2:06pm No "oomph" (technical term) at all to that last lift attempt. Couldn't clear 45 to trigger panic short covering.

2:10pm Helluva scratch Don. Markets getting ugly. Dow -310.

2:15pm Back in the "buy the panic extreme" scalp mode ... similar to morning barf. Tried for the reversal but was no go. Scalping extremes now.

2:40pm Tricky down here. On sidelines.

3:05pm Not in sync down here. Tough to read. In gain preservation mode for now.

3:50pm No trades.

OK, only a few trades in the afternoon, and nothing with size. Closing the book on a decent and highly efficient $25K day. Clearly, a very painful day for investors. The key at this end is to make today feel painful for me as well.

Today is history ... tomorrow matters.


Anonymous said...

Don - Great commentary throughout the day. Looks like today worked out well for you.

I was short all day on an ES swing trade that finally got some legs today.

I have been in the process of moving into a new house and getting new my office set up again so I have been unable to actively trade. I feel like I missed out on a lot of opportunity because of this.

Do you have any thoughts on how to work through the fairly standard frustration of missed opportunity?


Don Miller said...

Hey Eric.

Heckuva short ... nice.

With respect to not beating yourself up over missed opportunity, my only suggestion is to look at trading as a very long-term endeavor which will definitely include times you're away from the market. Nothing one can do about that.

I also have non-market commitments -- both business and family -- which have caused me to miss out on moves. Ultimately, if one is very serious about this as a business, there will be times requiring cancelling of all plans when the market is fertile. As has been said, sometimes 90% of success is simply showing up.

Hang in there.


cal_trader said...

September is here and game on! Nice to see some movement with volume. Expecting a solid ranging day tomorrow...or think the Employment numbers will gum it up?

That late day rally was a nice short although I only took a very small piece of it. Market couldn't make it back to the 5ema all day..sheesh!

Looking forward to tomorrow and happy to see you had a great day. Let's have tomorrow be even better :)

Don Miller said...

Dang, forgot about the jobs data tomorrow. Boy do I hate it when economic data ruins natural market rhythms.

Yes, the volume return is a welcome change ... almost forgot what it felt like to see the DOME jumping off the screen.