Pre market analysis 5-25-11 Wednesday

News: Durable goods @ 8:30AM,

Trade plan and Price action analysis: (Price action) Yesterday closed below value with sellers in control but we are still in the same area as yesterday. Globex sold off last night finding support at 1302 area and has bounced from there. Globex has moved back up into the 1314 vpoc of yesterday. We have aq P shape on the overnight profile which is showing sort covering at the lows here. Es keeps drifting lower on the daily and I'm starting to wonder if the bulls area ever gonna step in and try to push back up.

(Trade plan) Without any substantial news releases today we could just balance in this area again today. The macro structure is bearish with globex value establishing lower on the previous day and its possible to see some follow through to the down side today. At the same time this is a good area for the bulls to start pushing back up for a little relief/short covering rally. So the risk is really on both sides of the market. If we start to take out the lows of the 2 day balance area and break the cvpoc at 1312.75 we could get a flush move down into next support areas. On the upside if we get above the 1318-1320 level that could open the door for a gap fill back up into 1327-1329 area where i expect sellers to be active. Over all im expecting balanced trade and will look for long and shorts at my levels unless the market tells me it wants higher of lower prices.

End of day review 5-23-11 Tuesday

Trade plan and Price action review: (Price action) The day opened and we pretty much chopped around all morning. The market tested up into the 1322 chvn and the globex highs just before the figure released. We traded down breaking the IBL and started trading into the previous day's range and bounced off of the vpoc at 1315.50 back up into the IBH where sellers were active once again and they pushed down into the 1314.1316 level where the market went into chop mode for a few hours. We broke down a little bit testing the globex lows at 1312 where we bounced. This was a good area to look to get long. The bounce was weak but we were able to trade back up into the IBL were sellers were active once again pushing ES down below the day’s value area and closing below value. Vpoc stayed in the same area as yesterday and the sellers seem to still be in control of this market.

(Trade plan) As per my plan the market did balance in front of the econ release that was really not a surprise. Sellers were active on the push up into the 1322 level I have on my chart. I identified the 1310-1312 level as strong support and was looking to be a buyer there. The buyers were there and I wasn’t around lol. Maybe next time.

Trades review: (Hypothetical) See 5 min chart with black circles

(Actual)

1^st trade: I went short on a break but price wasn’t acting the right way for me to stay in the trade so I bailed. The market did follow through to my target but when its choppy I don’t like sitting in a trade.

2^nd trade: I went long but I was a little bit early. Perhaps I jumped the gun a little bit. I got out of one lot for +5 ticks and BE on the second. I had to go outside otherwise I would have held it longer because the 15.75 level was offering good protection for my stop. Market ended up hitting my target at 1318.25 (61.8% retrace level).

3^rd Trade: I got short at the IBL and the 61.8% retrace level. Price was acting right and I was at my level and we had already rejected that area a few times so I took it. I got out of 1 lot at first target of +2 points and the second I let run to +3.5 points. Nice trade.

Conclusion of the day and thoughts going forward: The day was really choppy once again so I stayed patient and was prepared to not make a trade at all if need be. I waited for the opps to come to me. There was a few opps in the morning but the figure was due out at 10AM and I didn’t want to enter a trade in front of a release. I stuck to my plan and I got paid for it. I think I have finally made the turn. I am starting to see trading in a different light now. I’m realizing that it’s just a matter of discipline and having a plan and following it but at the same time being flexible with it. The market can do whatever it wants but that doesn’t mean that you can’t be prepared to react no matter what the direction is that it wants to go.

   I need to see how I will react to a few bad trades. That will be the real test.

Grades:

Following my plans: A+

Following my rules: A+

Trade execution: C+

Pre market analysis 5-23-11 Tuesday

News: New home sales @10AM

Trade plan and Price action analysis: (Price action) Yesterday ES gapped lower before the open and just traded in a range placing value lower and shifting the vpoc down 17 points. We tested the cvpoc at 1311 area and bounced from there up into the 1318.00 area. Globex has traded higher throughout the night and leaving a p shape on the profile which is indicative of short covering over night. Holding above the cvpoc at 1311 is key for today's trading.

(Trade plan) We have new home sales figure out at 10 am and we could get a balanced open leading up to that release. With yesterday big gap down and then a consolidation it tells me 2 things. The bears are happy with that area for now and were not willing to push below the cvpoc level. And that bulls were not interested in running the market back up to reject that area. We built acceptance there. Now today i need to see if there is going to be any force in either direction placed on the market. And i will form my bias as i watch the day unfold. But to have a plan means to be ready for any scenario to play out so im expecting sellers to be active on any pushes up into resistance area and will be looking for selling opps there. If we take out the globex highs then a possible gap fill is likely and i will be less aggressive on shorts. In the case we start moving lower i will be a buyer at the 1310-1312 level as this area is strong support and the bulls will not want to see the market below here. Over all i will be patient and wait for the set ups to develop and will  not be looking to trade if i don't see any set ups i like.

End of day review 5-23-11 Monday

Trade plan and Price action review: (Price action) Nothing really developed today price action wise. We gapped down below value and buyers nor sellers decided to make anything of it. We balanced all day establishing value lower down as expected just above the mcvpoc at 1311.25 area.

(Trade plan) The day established value lower down as expected and nothing else materialized on the day so i didnt place any trades.

Trades review: (Hypothetical) There was a long opp at support around 1309-1311 area during lunch time. And a short opp at resistance area 1318.50-1320.00 area. These trades were a little risky being we only  had a 6 point IB this morning

(Actual)

1^st trade: None today

Conclusion of the day and thoughts going forward: It is equally important to know whne not to trade as it is to know when to place a trade. Today was a good example of when not to trade especially comparing to the last few weeks of trade. If you were desperate there was a feww trade opps as stated above but the day was better spent catching up on some old paper work or looking busy at your job so you dont get fired lol. I choose to do both.

Grades:

Following my plans: A+

Following my rules: A+

Trade execution: N/A

Pre market analysis 5-23-11 Monday

News: No news release today

Trade plan and Price action analysis: (Price action) Fridays OPEX days had a bearish tone with value establishing lower and and the heavy sell off in the afternoon. We closed at the lows and below the day's value which was a sign of the move in globex last night. Globex has traded down to th mcvpoc at 1310.00 area. We have bounced from there and need to monitor how far we rotate back up.

(Trade plan) Without any catalyst today we could get a balanced session where we just place value lower down. Although the globex session is very bearish right now and on the cusp of breaking some significant levels. It is very possible that we get a gap and go type scenario and i will be watching for this. I will be watching the open to gauge who has control and see if we are going to trade lower today or balance. Depending on the open i may not be as eager to buy support but will be looking to be a seller if support breaks or opn PBs into resistance. If we start breaking above globex highs the bulls will have taken control back and i will expect higher prices if we can hold above it.