Thursday, December 4, 2008

Thursday Notes - Range, Range, Break

1:05pm 15 minute ADX 9.31 -- no need for much more description. Gotta be a strong break one way or the other soon. We'll see if it's today.

Thus far, the early trade has been a repeat of late Wednesday's, with the market holding interim supports, yet doing so with very little pace and rhythm as continual probes to the north have all been made with little volume and have been met with selling.

1:25pm 30 minute ADX 9.08. VIX sneaking up, but no selling interest yet either. Did they close the markets today? Checking the calendar to make sure it's not Saturday.

1:34pm Still no strong volume to push this sucker either way. Been doing small probe trades, but very limited opportunity thus far and not trying to force anything has been the name of today's game. Thought the VIX tick to the north might get us moving to the downside, but no-go so far.

Quite the difference from recent months thus far. What I find somewhat interesting is that we seem to be in a non-volatile market with the VIX still in the 60s (yet down from the 80s). 'Tis indeed a different age now and I guess we need to continue to adapt. Still, there ultimately has to be a strong break one way or the other.

btw, there was a good question posted in yesterday's comments section regarding my feelings on the last hour. My response mirrored that which I've often stated, yet I again stress it's a matter of different strokes for different folks and that trading is so much more than simply charts and patterns. There's actually some great interaction in comments to previous posts ... if you have a chance to go back and look at them again later.

Actually, it's not a bad time for me to be taking my mental break (simply defined as reduced trading), considering the highly lackluster market action lately. So I suppose in a weird sort of way, perhaps I'm still somewhat matching the market's internal rhythm in that we've both slowed it down. I imagine range traders (not my game) are cleaning up.

2:11pm zzzzzzzzzzzz. You know it's bad when I stare at the blog countdown clock. Actually, I'm tending to my non-market obligations ... always good to have something to keep you occupied and that pays the bills so you don't have to force things.

2:21pm 15 minute ADX still below 10. "Not a creature is stirring."

2:30pm 1, 2, 5, 15 minute prices and 15 minute VIX all right on top of their moving averages. Sick, but this has to pop hard soon.

2:44pm Took a probe long on that last attempted break, but stopped when it didn't hold 865. Might have some stuck longs now.

2:55pm Nice earlier stop, got some table scraps on a reverse short scalp as market clearly rejected higher prices, but that's all the market is serving right now ... scraps. Still suspect volume though and inside the morning range. Sense weakness though.

3:00pm Short 859.25 small size "just in case" I read that rejection right. Longs have to be stuck.

3:05pm Final cover 851.25. Not bad. Looking to short any pullback hard. VIX popping nicely. Want mid-50s for short, but we were coiled hard and pullbacks may be tough and shallow.

3:13pm Took 50.25 down to 46.50. Wanted better price for size.

3:16pm Strong reads Don ... now just focus. Might only get one more shot and timing will be critical.

btw, I titled the post around 1pm to try to keep my head in the game and focused on looking for the break.

3:22pm Shallow pullbacks not a surprise, but it's my price or nothing. Chip gain now in the green on the day and not giving it back. Now want high 40s to short or high 20s to buy the next puke.

3:35pm Eyes now looking to the morning for you-know-what, which combined with jobs data should be interesting. Still might take one more entry, but watching for now.

3:41pm Nibbled long on last mini-puke ... got 833.75 to 835.75. Small sizes though unless we get deeper pullback or extension to the 20s. Watch the clock Don ... time running out.

3:48pm Nice ... nailed 843.75 short and covered down to 838.75. Small sizes as it was getting late and that's a wrap.

+$13K chip gain on the day, with most of it coming late. I definitely wanted to put larger sizes on, but I didn't get my entries and settled for shallower pullback entries with lesser size to at least get something on.

I posted the chart that shows the first clues into the stuck longs. The left part of the circle shows a very bullish formation and which I probed long. But when it broke, all bets on the long side were off and the probability shifted heavily to a plummet from longs who didn't realize they were stuck until they had to panic out.

Back at it tomorrow.


Benjamin said...

Dear Don, just wanted to thank you for your extremely honest and insightful blog. After 10 years of trading (divided into varying time intervals spent actual trading, lying on the office floor in foetal position crying, and rebuilding of captial and confidence to start again), i do not lay claim to anything but the most modest level of mastery over the markets (or should i say myself) however i do think i have learnt enough to recognise that if your blog was a mine of trading wisdom we have hit the mother lode! i would encourage all traders to come back and re-read your posts regularly as their "trading journey" continues as there is more "gold" to be found with each new perspective. I personally have printed and pasted comments that have particularly resonated with me on my offce wall. The only trouble is its starting to get quite full. When my wife asks me what its all about i tell her its fertiliser for my bamboo tree. Again my heartfelt appreciation for taking the time to share with us.

Don Miller said...

Hi Benjamin -

Wow ... I'm not sure how to respond.

In all seriousness, I actually do remember the crying and confidence rebuilding times ... which sometimes seemed to take forever or kept recurring time after time after I swore I was over them.

Thankfully, life is long. It's the only way this stubborn trader would have ever made it to 2008. That and help from Above.