Tuesday, February 17, 2009

Tuesday Notes - Tip of the Hat

6:00pm Well, if you traded well today, I tip my hat to you in a major way as I felt today was one of the more challenging days in recent years from a technical analysis and pace perspective.

At this end, I fouled off several pitches during the day -- especially early as I helped provide liquidity on the long side during the early nosedive as the TICK approached -1000 -- but managed to stay at bat long enough to somehow eek out a slight green day thanks to a late day short sequence just south of 800 which reflected both a technical and psychological line in the sand the whole world was likely watching. I would have bailed on a trade above it.

Yet aside from the two early and late day surges -- both of which offered little in terms of a second chance to fade them at wholesale prices (the PM provided a small 1 min divergence, but 'twas getting late) -- most of the day lacked solid opportunities for this trader.


Ziad said...

That was probably the nastiest price action I've EVER seen today. Absolutely horrible pace and fakeouts galore. Definitely not a usual day, and thank God for that. But days like this will happen and we gotta shake 'em off and not let the memory of them affect our coming trades. Here's to a better day tomorrow!

Don Miller said...

Ziad -

I just looked up "nasty" in the trader dictionary and it showed today's chart. That was pretty bad.

I'm actually shocked I came out ahead as my W/L was probably under 20%, but I guess keeping my sizes down and staying on the sidelines at times helped.


Unknown said...

Don just started viewing you blog and I appreciate the time you put into it. I would agree with your comments on today. Tomorrow is a new opportunity, "Play ball"


Don Miller said...

Rick -

Toss it in the fireplace ... right on top of my mess from last Tuesday.

I'll help light the match.


jimmaya said...

Chopsville, thats all i can say...DM, do you ever use pit noise?

Severino said...

Today was a good example for anyone thinking that tick extremes were the holy grail.

Finished with a modest profit and a more valuable reminder.

Live long and prosper,


Don Miller said...

jimmaya -

No ... I have enough noise going on in my head :-).

Severino -

Agree ... although I'd like to have bought a few more when the TICK was -1400 around 9:50am ET which is pretty darn rare and preceded a 8 point pop. No doubt the drop from -1000 to -1400 was a nasty flush for some.


Unknown said...


I had the same deal as you-struggled to keep even all day until the end failed rally to make a small plus.

I kept thinking to myself : if everyday was like this NOBODY would trade...my head still hurts-what a grind!

E said...

Strange things sometimes happen during option ex week. I found the discrepancy between the overnight high and the RTH high seemed wider than normal.

For me, the challenge today was being paranoid about shorting too low with Friday's gap open.

The stimulus package was also on everyone's mind, but generally the RTH open and previous low remained resistance other than the db jam and headfake to 99.75 that trapped eager longs again.

I like trades with the trend whenever I can find them; not as nimble as some of you youngsters.

Anyone else a little groggy after the three day weekend, or am I the only one that needs retraining?

Thanks Don, Hi to all.

Being said...


After the usual 6 hour vigil, i ended almost flat, -0.3% on this day when i felt like the knight in the Monty Python movie after he gets both his arms and legs hacked off. That end-of-day fakeout rally was the final chop.

George "Winace" Swanson said...

My trade %'s of success are high, but that does not mean I do not have unrealized drawdown days! Today was definitely one of them. My technique is original from what I can tell (never seen it replicated). My hold times, positions sizes, entries, and exits are all determined from price action, so I do often hold some securities overnight, for the gaps play a large roll in uncompensated price extensions. I do have some pretty good signals, that when we do (not saying it is SOON!) have an up day, it is going to rip some faces off! Be on your toes for price action like today, but twice the magnitude in reverse! Regardless whether I played my quickly compensating ETF trades, or the lengthier securities trades, getting in and out on a day like today, with profit deserves respect, my hat is tipped in your direction!

Unknown said...

Your peaking at my cards again Don :)

RexVulgaris said...


Dont wanna sound like an arse and have had plenty of tough days but didnt see ytd as on eof them ..... after the 1st 30 min was a just a bracket day.. spose was unusual for no follow through but was readable

I see one NASTY moment ytd.. and that was the fake out on the 9.50 break of 793 down to 786.75 on noted highly unusual -1400 tick. But 793 has been a spot on the radar for ages and was the airpocket boob low... so a squirt on break was not that suprising

There was a nice ss OP on the recovery at the open 797 with a tick spike on weakening tick structure.. took it but ran it poorly.

Then structural divergence with tick spikes at 12.25 and 13.28 gave safe longs, but with weak internals all longs were scalps for me.

14.40 again a ss 95.75 against the opening.

Then avoid the last 45 shenanigans
which mystify me and counted ytd as a dull day

ON tick spikes.. they are NOT the holy grail but can be used within context of your own market read to get great entries. Personally i almost never trade a new tick extreme.. always looking for his slightly weaker twin brother


MACDOW said...

Hi Don
and all your fans...

So Tuesday was a chop chop day!
I wonder how many of us sat glued in front of our screens all day hoiping that the break would arrive? Besides the opening fall the day was a lesson in fustration. As someone else said If we had days like this every day there would be no trading. Still on days like yesterday I try to think about the action in october :) That was great and the moves just kept comming...

Thanks for the great blog Don, its part of my morning routine to see if you have been stressing like me or if your day went much better...


Don Miller said...

Very well stated David.

Good stuff as always Rex.


Unknown said...

Don, Thanks for the weekend posts. Its refreshing to read from someone who seems to have is ego in check. Too many times I've read in other forums and blogs and the ego could not fit on the page.

Your blog got me thinking about purchasing a couple of books on human behavior (one was your recommendation). Hopefully, it will help me understand why I don't pull the trigger.

On the day...
Could have had a better day, had I pulled the trigger at my designated points.

Agree about the TICKs. The only time I use them now is when they hit extremes at key support/resistance levels (of course I have to remember to pull the trigger!).

Anyway, we'll see how tomorrow plays out. I'm expecting it to be a little more volatile as the President announces the housing plan. Not sure if it will be the same 3:00pm action on 2/12.