Hello Traders,

This evenings post will be a weekly wrap up. let me preface by saying that many people don't bother using Tick charts that show this many Ticks (6765), but I do, and I find it works really well. Why the number 6765? Because it's in the Fibonacci Sequence (Its the 20th number). What's the Fibonacci Sequence? It's a sequence of numbers defined by the recurrence relation in the equation fn = fn-1 + fn-2 where n>3 or n=3. Ok? You know what..just Google it. The general idea is that the sequence appears throughout nature, (In flower pedals, rows on a pine cone, and even starfish) so it should make sense for it to appear in the markets. Now we all know that markets don't behaved in a predictable pattern, buts its a good starting point for analyzing market data. Math lesson over, lets go to the charts...

We entered the week over-bought. SMI's where pegged in the high 60's, low 70's. After the initial pullback, bulls tried to get things going again early Tuesday. The rise in price set up a nice divergence (marked with white lines) for shorts. On Wednesday, I identified 1016 as a target on a pullback as well as a possible head and shoulder's forming, that could portend much lower prices. By 10am Thursday morning price had reached the 1016 target and the dip buyers stepped in. Last night, I said look for a gap up early Friday, which we got. Price faded nicely and now SMI's are showing a bullish looking formation with short term MA's pointing higher.

Even though we ended the week essentially where we started, I think the action was positive for bulls as there isn't much good news left to cling onto. They managed to defend the higher prices well. especially the breakout level 1016. I will be checking out other charts and reading a lot of news this weekend. Also hoping my home state of Pennsylvania gets a budget passed before the G20! I will likely post Sunday night with some predictions about next weeks action. Enjoy your weekend everyone

$ Nate

08/27/2009

Hello Traders,

I want to do just a short blog post tonight as its been a long day! The target of 1016 was filled and that's about it for the pullback! Very bullish news was again muted this morning but buyers finally showed up after lunch. The Asain markets are about to open and price could get a little pullback it to 1020, then I expect a gap up tomorrow which would be a great shorting opportunity. If you are in the Elliot Wave Theory camp they are looking for a high in the 1041 area then a big drop from there. Other pattern traders are saying a bearish broadening megaphone inside of a broadening megaphone pattern. Anyway you cut it we are range bound this and shorts above 1030 look good along with longs below 1020. I'm flat ES waiting to get another stab short. Good night

-Nate

08/26/2009 TD Ameritrade Special

Hello Traders,

The top is forming nicely. I drew a "head and shoulders" on the 4181 chart and identified 1020.25 as the neckline. Instead of H&S I just call this pattern T&D for the TD Ameritrade commercial that made it a household name [disgusted]. Notice how today's New Home Sales and Durable Goods numbers were pretty outstanding, both coming in above estimates, and yet price couldn't make any progress higher. Looks like this market is ready to roll...

There is plenty of support on the way down but I think mid 990's is a good target. Waiting to see if the bears can get things going. Remember, bulls could drag this out til end of the month to make their numbers ;) I'm short the ES

-Nate

08/25/2009 Top Forming

Today I zoomed things out a little to show you this top forming. I stick by my call from yesterday: The top is in, and we need a pullback to 1016 or lower. Here is what I'm seeing.

Longer Term Divergence going back to 08/21
Shorter Term weakness in the SMI's
Both the long and short term Double MA's going red
Fisher showing weakness and unable to get above -0- line

I also drew out how I imagine the indicators to look when price rolls over. I'm sorry I don't have any fancy chart drawing software other than what came with Ninja Trader. I think you get the idea though. I'm still short the ES

-Nate

08/24/2009 Very Bearish

I haven't been trading much because of the new job, but I also never take my eyes off the markets. I just want to say that today's action was, in my book, incredibly bearish. So why did the price go down today, and why is this bearish?

People were rushing to buy right out of the gate and at 1pm there were only sellers left. Did the sellers come out in force, or did the buying just stop? I think it was the latter. No.. more.. buyers..

Listen, no one wanted to chase this thing ahead of all the data this week. To me, that also means no one will buy if the data is good and prices go higher, because then they would DEFINITELY be chasing it.

There is a lot of talk out there in blogs and financial entertainment TEE VEE about how the S&P could go to 1200. I think that's a little ridiculous don't you? That would mean oil could be around $85 a barrel. People will be pissed with gas at $3.00 a gallon +. Now, I was going to post a bunch of fundamental based reasons why stocks could go lower but the charts do a great job of painting the picture, and they are all that seem to matter anyhow, or we wouldn't have rallied this far to begin with, right? Ok,

You need to understand even the basics of Technical Analysis if you are going to trade profitably today. If you are reading this, I assume you do. On the chart I posted, observe the divergence on the RSI and the MACD. The Wm %R is showing overbought and prices tagged the upper Bollinger Band. On the daily chart today's candle appears as an epic DOJI. If you have ever opened a book on candlestick charting and gone to the "Bearish Setups Chapter" the DOJI is probably lesson #1. Lastly, this quote today from James Cox, managing partner at Harris Financial Group says it all: "We're lining up here in advance of the data this week...This is a good time to get out."

So where do we go from here? Well the breakout level would be the first test. I'm going to short the ES and look for a 1016 target. Price may get a short bounce there but it will eventually go lower. I am putting on my shorts now because the easy trade is on the table. Take it while you can. However, I'm not going to be CRAZY about attacking this to the short side (yet). To me, a pullback is definitely in order

Trades for 08/18/2009

Hello Traders,

Today was a trend day in my book. I didn't make it to the screen until the afternoon so I missed most of the action. I made one trade It was a counter trend short. You can see it marked on the chart. It was good for a quick point. The rest of the afternoon we kinda bounced around in the upper range. Everyone is watching the 991.50 level closely as this is the 50% retrace from the lows of this recent move down. If bulls can't make a push over this line things could get hairy.

Tomorrow I will be starting a temporary position at a Non Profit here in Pittsburgh. I'm very excited about having a job but at the same time sad to leave my trading desk. If I blog, it will be light. Trading is an addiction for me. I have been doing it for almost 6 years now and I doubt I'll stop. My strategy will likely shift to swing trading and for that I use deep in the money options.

I appreciate all the emails and friends I made in the few short weeks this blog has been in existence. The best part about blogging your trades is making yourself accountable. This alone has improved my skill 100%. It makes you think a little harder before you pull the trigger. I recommend any struggling trader do the same thing. Thanks for reading everyone. This is goodbye... for now ;)

-Nate

Trades for 08/17/2009

Hello Traders,

Monday was a drag. By the time anyone woke up the move was over and the money made. Futures had gaped down and stayed there ALL DAY. We didn't even get that last 15 minute rally courtesy of 85 Broad Street. Just chop all day. Even worse, Twitter was down making me extra bored. On a day like today I want to limit risk so I trade one lot. I had two trades one for +4 and one for -4. So Mirus made more money then I did. Hopefully things are more exciting tomorrow so I have something to blog about! See you then

-Nate

Trades for 08/14/2009

Hello Traders,

I'm titling this post "How To Lose Money Lesson One". To start lets talk about the indicators I was so excited about last night. For one, The charts worked extremely well, even though we spent the majority of the day in chop. Unfortunately, my execution was sub par. Here is what happened.

This morning we were consolidating at the recent highs. Aggressive traders could have taken a short at 1012.50 when all the indicators were pointing lower. conservative traders would have waited for the chop to subside, or to break below recent support. I marked the entry at 1008.75 and an exit when all indicators went blue at 996. That's 12 points! great trade right? wrong! I missed the whole move. Don't even bother to ask why, there is no excuse for missing that move. none.

Moving on. The SMI formed a nice little divergence at quarter to 12 that I marked with the white lines. You could have taken a long there with stops below the swing lows (992.25). I took this signal and 45 minutes later decided to give up on the the trade closing out at break even. Technically there was no reason to exit, other than I wanted to limit risk during the lunch hour. The proper way to manage this trade would have been to keep moving my stop up to the most recent level of support. Failure on my part once again. Epic fail I might add, because this ran for 10 points.

Remember yesterday when I said if I made $1100 I would be buying all of Pittsburgh drinks? Ya, well that ain't happening. My actual trades are plotted on the chart below. You can see I got chopped to death all afternoon. I took a loss of 19 ticks or $237.50. Putting me basically at break even for the week. Lower on commissions. It is not a good feeling to spend 40 hours staring at these charts all week and have nothing to show for it. That really doesn't even count the endless hours I spend on forums, this blog, tweaking setups, and all the other research I do on a daily basis.

Failchart


I'm not going to let myself get discouraged though because there is still a lot money out there to be made, and I plan on making it. I'll obviously be working on this all weekend, along with refreshing my programming skills so I can get some type of strategy set up that I can back test. I'll work on the rules tonight and post them at some point tomorrow. Thanks for reading guys enjoy your weekend, especially If you made money!

-Nate

How I'm gonna trade it tomorrow

Good evening traders,

Mike Vik signed two years with the eagles and I vomited a little bit in my mouth and had to swallow it. Moving on...

Here is how I'm going to play it tomorrow. First check out the chart above. You like those entries? go visit Big Mikes Trading Blog. This is most likely the chart I'm going to trade off of tomorrow. You can play along at home if you have Ninja Trader. I'll likely be using one contract just to test it out and I recommend you do that same, or just trade it in SIM.

Follow me on Twitter, visit the sponsors. You know the drill. See you tomorrow

-Nate

Trades for 08/13/2009

Hello Traders,

No trades today! If you follow me on Twitter you know why. But if you don't, my daughter had a doctor's appointment at 9am and I didn't send her to daycare after. So I was in and out periodically throughout the day, doing a few tweets and watching cartoons. Its a shame I didn't trade because there were some great setups! The rule is no trading with kids around, so I stuck by it.

Lets talk about the new chart!
Its from our good friend The Wizard at Big Mike's Trading Blog . I had it running all day to grab live data. looking it over, it gave some decent entries that I'm really excited about. The rules for entering and exiting are on the forum so go check it out. Here is the gist though, when the fast SMI line crosses the Slow SMI line take a trade with the trend. pretty simple right? Maybe...

I'm going to go over some of the setups produced today. I marked them on the chart. The Arrows are entries and the 'T's' are exits.

The first one was a long at 1000.75 and flat at 1008.75 (marked with a "T"). Nice 8 point move right!
The next one was Short at 1008.00 and flat at 1006. Good for a quick two point scalp and helpful in setting up a great divergence (marked by the sloping white lines).
The Divergence played out well, giving another short at 1008.75. This one was good for 5 points! exit 1003.75
The last trade was a long at 1005.50. Its still running but I would be getting flat here in AH at 10012.50 so we will count that 7 points.
So 22 points total or $1100 in profit in one day.

So what do we say, Freaking super right! No, not really, ha! These things look easy in hindsight. Trading this thing live is another story. You have to have a keen eye to recognize the support and resistance levels. Also it just so happened we had a volatile day. Lets say we had a choppy day like yesterday, where we zoomed up at the open and chopped around there until the Fed announcement. What would have happened? I lost 28 ticks yesterday if you remember (I sure do). So caution is advised before just jumping in with both feet.

Another point: The original chart setups actually did better than this one! Mostly because it gave entries a little earlier and got you out of trades quicker too. The conclusion, this setup lags a bit. Now that is not necessarily bad. It might be less likely to get you into a false signal. In my opinion, we have to be in a pretty decent move to get those two SMI lines crossing.

EDIT: Wiz sayz use a 380tick chart for entries kids! I'll be checking this out further in the meantime keep reading!

So, here is what I'm going to do. Give this chart a chance tomorrow and trade it with one contract. I'm still up on the week, although a small amount, and I'm not really in the mood to blow it. Now if I make $1100 then I'll obviously be buying everyone in Pittsburgh drinks! So lets see how it goes, follow me on twitter @twitter.com/infected1172. You don't even need twitter to see the updates, just open it in your browser. Visit big mike's blog to download the chart and templates for Ninja Trader and you can follow along. Have a nice night everyone

-Nate

Trades for 08/12/2009 FOMC DAY

Hello Traders,

Today was a blow out for me -28Ticks ($350) pretty much giving back all of yesterday's decent gains. There isn't much to say about this mess today. I couldn't get on the right side of the market until 2pm when I got a decent short entry. Of course I got out too early and ended up getting sucked into another short which was a stop out. I should have been long at that point. But again, blew an entry. The book was so light at points, and the action so whippy I got headfaked into losing money all day.

I'm not even going to talk about the trades because I didn't have a decent winner until 3pm. A winner I should have let run for 4 points! You can see the entries on the chart. Go ahead check them out, you will be asking yourself "What the hell was he thinking??". I'm obviously in a bad mood. I made mistakes left and right today. Its tough to trade these FOMC days, they are best left to the pros, And by pros I mean those with 25+ years of experience!

Overall, I'm not feeling too bad about the losses, its not like I blew up the whole week. Now that I think about it, this is the first losing day I have had since I started the blog. So I'll come back tomorrow with a fresh outlook and a few lessons learned. Odds are about 100% I won't trade the next FOMC meeting! Thanks for reading guys. Congrats If you made $$ Today. See you all in the morning

-Nate

Trades for 08/11/2009

Hello Traders,

Hope you did well today, it was a pretty easy day. The market threw some fakes toward the end of the day but I had wrapped it up by 2:30. All the trades I took today were posted live on my twitter account @infected1172. Lets talk about them real quick

First Trade Short 998.50
Pretty straightforward here. market was in a downtrend, I just needed price to break the 999 support level and I was in. The next two candles were whippy but we finally broke down and I took profits at +4 and +8 ticks.

Trade Two Long 991
I was kinda salty I missed the rest of the move down, but there are always more opportunities to make money. I knew 90 would be support so I just had to wait for the indicators to turn up. The indicators were already showing a slight divergence, making higher highs, I drew white lines to show this. We got a good pop but not what I was expecting and I captured a point on both contracts. I said on my twitter account that I would re-enter again If I got another chance. That's exactly what I did. Nothing wrong with taking profits when you have them. +4 and +4

Trade Three Long 991.75
The bond auction went really well, so I entered a long position. The entry was sub par, I'll admit. I was using the 310Tick chart when I should have been looking at the 1151Tick. I placed the stop at the day's low though and sat on it. I tweeted that 994 was my target and I took profits at +4 and +10 ticks.

So that's It. Three Trades and 34 Ticks ($425 before commissions). I quit a little early but you would too if you did this for a living. My friend Chris at http://10k10weeks.blogspot.com/ was done at 10:30!

Tomorrow is going to be a decent day for trading. A lot of people are worried that bonds will lose their bid no matter what the fed says. How this will effect the market is anyone's guess. Trade your plan and you should be fine. and as always, if you like what you read, please click on the sponsors. Have a good night,

-Nate

Trades for 08/10/2009

Hello Traders,

If you traded today and made money, congrats. This was the lightest market I have seen this summer. I don't have actual volume stats to confirm that, but I know we didn't trade more than 1 million contracts until 3:45 EST. On a day like this you have to mix up your strategy. I switch to smaller time frame charts for entries and only use the bigger charts to get direction. The 1151Tick chart would barely fill half my monitor today! The chart posted above is a 310Tick. indicators are MACD, DoubleMA, ECO2, and VWAP. The shading shows standard deviations from the VWAP(volume weighted average price, you knew that though right?). You can get these indicators on Ninja Forums or over at http://blog.bigmiketrading.com/. I took one trade today for +5 and +6 for a total of +11ticks. Lets talk about it real quick.

Trade One, Long 1001.50:
I didn't get to the screen until 12 and completely missed the move down. This was because my rules say "Don't trade during NYSE lunch hour" (unless already in a trade). Most traders have the same rule, and especially on a light volume day like today, its a good idea to follow that rule.
VWAP was the crucial indicator today. When you see price getting more than +/- 2 standard deviations from the VWAP (for me) its a good idea to start looking for reversals. At 1:21 we where -2 standard deviations from VWAP, the MACD was showing bullish divergence, and Double Moving Average turned blue. I took the long at 1001.50. I traded 2 contracts because of the light volume and strong downtrend. The move lasted for a point and then got ambushed by the bears. I could have taken it off at break even, but I decided to through the pullback. The VWAP was in the cards, I was positive. In the end I turned out to be right and I took profits when we got back to the orange line. +5 +6 = +11

If you follow me on Twitter, you saw I was stalking a short into the close, but I never got a good set up. Time ran out and the bulls ran it higher. Conservative traders are done at 3:30 or 3 if they have profits, so I walked away from the table with a measly $137.50.

Some things to watch this week:
Wholesale Inventories are tomorrow. I expect it to be a nonevent and another slow day ahead of the Fed. Wednesday will have the FOMC rate decision, Federal Budget, and Crude Inventories. I expect the FOMC announcement to be a nonevent too, UNLESS they say they are buying back more treasuries. The announcement should sound like this though; "Rates will remain low, downside risks remain, blah blah blah", basically the same thing we have been hearing. Thursday we have Retail sales. This could be a blow out with gas a little higher and cash for clunkers in full swing, so be sharp. Friday will bring the CPI. I'm not an economist so I don't know what to expect, I do know that they will be watching Capacity Utilization closely because this number has broad implications for unemployment so be aware that its reported at 9:15am.

Unlike last week, which started off big and got slower, this week will start off slow and get bigger. Be sharp, and trade your plan. Good Luck

-Nate

Trades for 08/06/2009

Hello Traders,

the labor report came in a little better than expected this morning. I wasn't paying much attention, honestly. I didn't get to the screen until about 10 because I had a job interview, which was a flop! They sold off the market. someone must have told them that 6.3 million people are still sucking on the government teat. Tomorrow is a big day in the market. Bears might be able to get something going If jobs numbers suck. From what I am hearing people are worried that January and February numbers are going to be revised MUCH LOWER like 1million+ jobs lost. Either way, I will trade it with the trend which so far has been up...on to the trades for today

First trade Short 995.50:
This trade was a mistake that ended up working. The proper short was where I drew the white arrow on the chart and the break of the trendline I drew. I thought I saw something I didn't and took a short so far from resistance I almost got stopped for -4points. As you can see I got one point on two contracts for +8 ticks. risking 4 points to make 1 was bad. By the time we got back to my entry I just wanted out. If I picked the better (proper) entry I would have got 3 or 4 points. But "would have" doesn't count and the trade goes in the books at +8. Lesson learned BTW.

Next and Last Trade Long 991:
This one was off oversold conditions. A lot of buying came into the market at the 990 level and I just waited for the indicators to confirm. When they did I took the trade. The very next bar I got filled for +4 and +6 ticks. Traders using 3 contracts today could have stayed in for 3 or more points. I'll explain why I used two today in the next paragraph.

Today we traded in a range once we found value. I drew horizontal white lines on the chart to show this range. This kind of trading sucks in my opinion. You have to pick just the right points or you get chopped to death by the market makers. I traded two contracts instead of three today because I expected a slow and choppy day, and that's pretty much what we had. I would have taken more trades, especially because we had some great set-ups throughout the day, but I was watching my 4 year old daughter all day. You want a trading challenge? Try doing this while Dora The Explorer is on in the background! Not recommended for newbs... I prefer absolute silence, or sometimes NPR on the radio.

Today turned out ok. +18 ticks on two contracts. Ill take it, better than losing money right? As always, thanks for reading and please click the sponsors if you like what you see. If you want to know more about my indicators and charts visit Big Mikes Trading Blog http://blog.bigmiketrading.com/. Have a nice night everyone

-Nate

Trades for 08/05/2009

Hello Traders,



I was super busy this morning so no time for trading. However, I got back in plenty of time for the afternoon session where I banked 50 ticks ($650)! I posted the chart above and will comment on the trades later. In the meantime I want to give a big shout out to Big Mikes Trading Blog http://blog.bigmiketrading.com/ and the wonderful community of traders there! Especially Sharky, Wiz, Zeller, and Big Mike himself. These guys are the brains behind the indicators I use and if you want to learn to trade like them go visit the blog and sign up for the forums. I just talk trades!

First trade, Short 994.50:
I assumed a continuation on the downtrend would begin here. Especially because the top indicator got a nice divergence going. That wasn't the case but not a big deal. Contracts 1 and 2 were off for +4 and +6. The runner was stopped at break even.

Next trade, Long 996:
I could have gotten into this one a little earlier, maybe 995. but in the end I was happy with the entry. There was a big flush of buyers and the 993 area held up well, probably trapping some late shorts. Those who didn't switch their bias long missed a great move up to over 1000! I got contracts off at +4 +7 and +10.

Last trade, Long 998.75:
The top of the range here was 998.25 so if you were aggressive you could have gone long at 998.50. I waited til 998.75 because I didn't want to get trapped at the top of a range and have to wait through another pullback before we went higher. The order was triggered and I took profits at +4 +6 and +9. In the end I could have stuck with it, but the name of the game is accumulating profits and that's what I did today, going 3 for 3 for +50ticks.

Other news:
We are down in after-hours and some traders are thinking we have hit a short term top. I really don't think so. In my opinion, this market will go higher until something stops it.

Today's action in AIG might have been a good indicator of a short term top but who knows, really. Probably sell the news on Friday when they come out with earnings.

Tomorrow is the Initial Jobless Claims report. I expect that to set the tone for the day. If its in line with forecasts or above and the market goes lower that would be bearish in my book.

As always, thanks for reading the blog. Visit Big Mikes, Traders International and other links please. See you tomorrow on twitter

-Nate

Trades for 08/04/2009

Hello Traders,

Consumer spending is up while incomes fall, which makes no sense to me. But consumers make up 70% of the economy so it doesn't matter if they are broke as long as they keep spending! In other news, 5th consecutive gain in monthly home sales index and a pretty hefty one at that. I'm sure it has to do with it being summer time or whatever. This country is screwed unless we take our medicine and we all know that. You can get the regular bearish dribble on the other blogs. This blog is about Trades and I call them like I see them. follow me on Twitter, now...

Lets Talk Trades

Couple people starting noticing the blog, saying you can't trade live you just draw crappy MS paint arrows on your charts. Yes I do suck at MS paint, but no I can trade, I just don't do it EVERYDAY. Today I traded all day for a gain of +44ticks or eleven points using 3 contracts. I took a total of four trades. I turned the little entry arrows on Ninja so you can see. I'll talk about them real quick and why I liked them

First short at 997:
looked good because of the candle stick formation at 999. I don't know what that's called, and I really don't care because I know its bad. I circled it on the chart. Feel free to post in the comments if you know what its called. My stops are 3ticks above recent swing highs. I put them there so I don't get stopped out on some BullsS1t you know the market makers try to pull on you. I got the targets on contracts one and two and got stopped on the runner at BE.

Next short at 999.25:
Look at that, same formation on the candlesticks. Got one contract off at a point and what a didn't realize is that the blue line was SLOPING up and you don't want to bet against that usually. When its flat that's one thing but the market was clearly trending higher all day, so shorts for scalps only. Other two contracts were stopped out and this trade went for -8

The long at 998.50:
On twitter everyone was looking at the 998 level, and I had been looking for a Long entry since I blew out that short in the morning. I was upset at myself for missing the move up, but didn't want to chase. I had to wait for the pullback and I did. For this entry I just watched the price action and when I felt it was safe, waited for the indicators to turn up. The Market topped 998.50 and away it went. I got all contracts off in profit when things got congested around 1,000.

The last long 999.25:
You can see on my chart that I took the long at 999.25 expecting that to be the break out candle from the wedge. It wasn't, but the indicators kept me in the trade and the next candle was. Great breakout too. Took contracts off at +4 +6 and +9. I wanted to be flat at the close, sucks though because this thing popped hard. Blame the robots or Goldman Sachs or whatever. If you watch it everyday you know its manipulated. Just play by their rules and you'll be fine

I hope you guys did well today. Also, I hope everyone is enjoying the blog. if you like that you see follow me on twitter or click the sponsors, Thanks

Trades for 08/03/2009

Hello Traders,

They kept stabbing at the magic number today (1,000). Cash for clunkers is a big success so that pushed things higher I guess, I don't really know I just watch the charts. Financial entertainment TEE VEE kills me.

Lets get into some trades. First trade was on the break above 990, got a good run to 995 and stopped on the runner. Second trade was perfect shorted on the break below 997 and got almost another 5 points. Right before lunch we got a nice break above 995 and I caught a long for 2 points. Had to get out quick though because the indicators starting giving mixed signals. In the end, that early lunch trade ran pretty good, all the way back to 1k. They could barely get it over with the late push and the system signaled a short after hours. I don't trade pre or post market so didn't take that last one.

Notes on the blog:
You will have to excuse my sloppy charts, I need to make some improvements on the site and pictures still. I hope you guys follow along. Please visit the sponsors and Big Mikes Trading blog at http://blog.bigmiketrading.com/ . See you tomorrow

Nate