tag:blogger.com,1999:blog-27564376971666495202024-03-13T00:32:54.873-07:00Infected MarketsInsights on trading Emini Futures from a serial day traderNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.comBlogger69125tag:blogger.com,1999:blog-2756437697166649520.post-26002972599131007862011-07-20T18:59:00.000-07:002011-07-20T19:11:28.053-07:007-20-2011 Revisiting the Umbrella<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeXilyETjK9CZe6URGHEN-z_5dGUWH1-gDOTQQQJKuQRh-x-yLcw8UvjxshsB3_cnd6MwYq_XyZlfaK4GofnV7OeEB2c204mUznOKTG1Bp8K4jCRAKOND3ouAQS4-BgZt2wPduH-WOPbMP/s1600/umbrella+2.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 306px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeXilyETjK9CZe6URGHEN-z_5dGUWH1-gDOTQQQJKuQRh-x-yLcw8UvjxshsB3_cnd6MwYq_XyZlfaK4GofnV7OeEB2c204mUznOKTG1Bp8K4jCRAKOND3ouAQS4-BgZt2wPduH-WOPbMP/s320/umbrella+2.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5631619958721898818" /></a><br /><br />Hello Traders,<br /><br />I just wanted to revisit the umbrella one more time before I move on to another topic. This afternoon the patter developed late in the day, I bailed on my long trade and flipped short on the break of the regular trading hours (RTH) mid-point. At that time I tweeted that testing 16's was a possibility. Sure enough price tested 1315.75 in the after-hours session. I rarely hold through RTH settlement but the weak close gave me plenty of confidence to give it a shot. Although I didn't get the full move I'm still very happy with the profit I did capture. <br /><br />Just to reinforce, this is a pattern you will see repeat itself very often. Part of trading is breaking down the market into easy to remember shapes, figures, formats, and patterns. Memorize as many as you can and when you see one begin to form you will have confidence in expecting a positive outcome. <br /><br />Thanks for reading and stay tuned for some new material. <br /><br />Good Luck<br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-49254940471528567212011-07-13T17:57:00.000-07:002011-07-17T18:31:00.228-07:007-13-2011 Umbrella Pattern<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj87K-A_lKYxwpPmGkoI4tG8EfKzOwnGwaSB2ah1Ol_0wwOj-FdBJm3wy0ZZ8-05k7cz2l8rJq52fyg94NpnjogtL6AISBHBmnoaLuiBNJMkkQOSHXzbUQdUfr22Sz4OksG26sOpW0s-sxe/s1600/7-13-11.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 306px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj87K-A_lKYxwpPmGkoI4tG8EfKzOwnGwaSB2ah1Ol_0wwOj-FdBJm3wy0ZZ8-05k7cz2l8rJq52fyg94NpnjogtL6AISBHBmnoaLuiBNJMkkQOSHXzbUQdUfr22Sz4OksG26sOpW0s-sxe/s320/7-13-11.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5629006036303212450" /></a><br /><br /><br />Good evening traders,<br /><br />Tonight I will review today's price action and introduce the umbrella pattern. I learned this pattern while studying with one of my mentors. The reason it is called the "umbrella pattern" is obvious when you view the picture. I drew in the cane part of the umbrella to make it easier to visualize. In this pattern price shoots up and then slowly drifts lower all day. The umbrella shape is formed by the EMA. This moving average is crucial on a 5 minute chart. You fill find that it often lines up with key areas of support and resistance, such as the volume weighted average price (VWAP). I never trade without it! <br /><br />After breaking over the opening range and then the initial balance high, prices were capped by the 25-27 resistance area. That area coincides with the lows of July 6th. Around 1:15pm est prices had fallen to the VWAP and minor support at 1322.00 I took a small long here but bailed after we couldn't maintain the initial balance high of 1324.25. In the afternoon I tweeted:<br /><br />"its after 2 pm est and we are below the initial balance hi, this makes me weary of taking any long trades"<br /><br />The mid point held as support briefly but prices were held down by the VWAP acting as resistance. Once the mid point broke, it became evident that we would end the day toward the lower end of the range. On the chart I drew a lightening bolt where you can tell the umbrella pattern is in full effect. Once price has slipped below the ema and cannot rally above, its a sure sign that a downtrend has emerged. The cumulative delta breaking down and a weak stochastic reading added more conviction to the short side. After the breakdown of the day's lows price had a nearly perfect extension to the 23.6% Fibonacci level. 1310's were also a low value area on the micro composite, a swing low from yesterday evening, and there was a gap fill at 1310.75.<br /><br />In after hours trade, news of Moody's reviewing US debt ratings dragged the market down to 1302. So far this decline has been very orderly with average selling volume on the way down. I am still expecting a test of the 1290's before further upside. This will of course depend upon the geo-political climate. Things are getting hot this summer and there is a lot of news for the market to react to. I will continue to monitor headlines out of the White house, Libya, European Union finance ministers, and blue chips 2nd quarter earnings. Make note of the umbrella pattern, I can guarantee you will see it again in the future. Just like in nature and architecture, The arch is also a pivotal figure in the stock market.<br /><br />Thank you for reading. Good luck and good trading,<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-54504964936398357992011-07-11T16:56:00.001-07:002011-07-11T18:30:53.390-07:00July 11, 2011 Recap<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8TnguKJZvXlrKoAFYgqlScPn8HKQZ6zYu-MXB4BIgFMuxulA1GH6uWnJmF1qQkglNHWH73qcKaGU6aHUmFyin40T0N4oQPfsRUFalFDNAvxJnoAI7HMUJGvgLThqQXbCLpz9k7ey13wXt/s1600/7-11-11.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 305px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8TnguKJZvXlrKoAFYgqlScPn8HKQZ6zYu-MXB4BIgFMuxulA1GH6uWnJmF1qQkglNHWH73qcKaGU6aHUmFyin40T0N4oQPfsRUFalFDNAvxJnoAI7HMUJGvgLThqQXbCLpz9k7ey13wXt/s320/7-11-11.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5628247916667267122" /></a><br /><br /><br />Good evening traders,<br /><br />I have been wanting to do a blog post on one of my favorite trades, The gap fill. This trade is a bread and butter move for most traders because of the frequency with which the setup occurs and the high win rate. Unfortunately there hasn't been many gap fills to write about. We barely even get a half gap filled anymore! I understand it is mid summer and the market dynamics are different during this time of the year, but I feel like this has been going on for months. Some traders attributed the decreasing of this phenomenon as a result of government intervention in the markets. The Fed's bond purchases and the increased volatility caused by the debt crisis in Europe seem like plausible explanations. However, I don't think anyone will ever know the truth. Regardless of what's causing the lack of the "gap fill phenomenon" one thing is certain, there will be a reversion to the mean. Keeping that in mind, its still important to know the trade and it's rules. I will revisit this topic in the future. When I can illustrate it in real time<br /><br />Today's trading was boring to say the least. the majority of the day we spent chopping around a 4 point range. If you bought the opening swing breakout in the direction of the gap around 1324.00 (always a high probability trade) you were lucky to get 2 points before resistance in the 26.00-27.00 range capped the upside for the morning, and the day. Remember that the first 90 minutes of trade is likely to contain either the high or the low of the day! <br /><br />Once the initial balance formed we were trading at initial support for the day in the 19's. Typically, the gap fill traders will puke up their positions around 10:30 est - 11:30 est. This presents you with two opportunities. One is to try and catch the late shorts then jam them back up into the opening range. (If you aren't market minded send me an email for an explanations). The other is to go with the trend. Given the bounce back we had below 15, I thought the trade was going to be trap shorts. I bought at 1315.25 just after 11:00 and the trade worked well. However when priced failed to get above the midpoint or VWAP(volume weighted average price) that was a good signal to take profits or initiate shorts with the anticipation of range extension. At the end of the day, price was ultimately kept above the monthly low and the S&P's 50 day moving average. I would consider this a pullback within a larger uptrend. <br /><br />Bigger picture; If we are to continue higher I'd say its likely we back and fill down to the 1290's. Or until the US budget is figured out, and fears of contagion in Europe subside. Today marks the beginning of summer earnings season, so be vigilant. Trade smart, don't gamble on earnings. Remembers "Traders know when to quit, Gamblers press their luck." Good Luck and thanks for reading. <br /><br />-Nate<br /><br />If you found this at all helpful or interesting please just click an ad. Thanks againNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-42044194091237491922011-06-15T19:35:00.000-07:002011-06-15T20:35:18.061-07:006/15/2011 Initial Balance RevisitedGood evening traders,<br /><br />This week I have been discussing the initial balance and how I trade it. Although today's action was dominated by the headlines in Greece, the initial balance still provided a great trading opportunity!<br /><br />The market had a large gap down off the open. Almost ten points. The expectation on a day like this is for responsive buyers to be active off the open. That expectation proved to be correct and price rallied to fill 50% of the gap. Traders call that the "half gap" trade and I will discuss it in future posts, for now let's focus on the initial balance. <br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidWUXUixKWxaKowcZufDfBMHKEUKklbd4jZe2CVwEctBEJArZJ_vgKExgP87bbbhl341nELvJWF4UacpxGO461c1y2B_hZpW_n7ueQWNv-VEIeVT-mpI7YtMd1e4Bq7v0Egfv-fHg7uQce/s1600/initial+balance+example+6-15.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 306px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidWUXUixKWxaKowcZufDfBMHKEUKklbd4jZe2CVwEctBEJArZJ_vgKExgP87bbbhl341nELvJWF4UacpxGO461c1y2B_hZpW_n7ueQWNv-VEIeVT-mpI7YtMd1e4Bq7v0Egfv-fHg7uQce/s320/initial+balance+example+6-15.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5618647380715527954" /></a><br /><br />After the rally into the half gap, price quickly reversed and punctured the opening swing high. This was the first clue that the initial balance was likely to break lower. While price drifted higher over the next few bars, cumulative delta showed that traders were not committed to the long side. A perfect short setup. This trade was a little trickier than normal because the initial balance was wider than my previous examples. In this case 7 points. That still puts it well within the average range of 4-11 points I highlighted in my previous study. <br /><br />When the market is in a headline driven mode, you can expect more volatility. As the Greece news hit the wire just before 11, ES took a dive. The sell off lasted until quarter after 3, finally coming to a rest near a previous composite low volume node. Generally the summer trading is slow, boring, grinding price action. With all the great headlines and debt crises around the world its going to be a fun season! <br /><br />Check back again soon. I will be providing more examples of this week's trade. The initial balance. Good luck, and good trading. As always thanks for reading!<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-19942471786641363412011-06-14T19:28:00.000-07:002011-06-14T21:15:42.326-07:006/14/2011 The Initial BalanceHello Traders!<br /><br />Welcome back, and Welcome new readers! A lot has chanced in the world of futures trading this year. Many new sites are popping up and many more professionals that were former traders on the street have begun to trade their own accounts. Some of the best traders I have seen since I started are now offering their insights and advice on Twitter, Blogs, and forums. FOR FREE! This is great news for the little guys out there struggling to make their way in the financial markets. I have been at this for over two years now. During this time I have picked up some high probably trades that occur nearly on a daily basis. I want to highlight these different trading ideas in their own separate blog posts. I hope you find them interesting and of course PROFITABLE! So lets get started..<br /><br />The first trade I'm going to highlight is based on the initial balance. If you don't know, the initial balance is defined as the first hour of trading during the cash session. For US markets and equity futures that time frame is 9:30 AM EST - 10:30 AM EST. The initial balance will set the stage for the day's trading. Its also important to keep in mind that the high or low of the day usually occurs in the first 90 minutes of trading. On days when the market has a wide gap off the open and begins to drive hard in that direction there is no initial balance. This trading idea works best on low conviction rotational days. Usually when there is little or no econ news, or the market is expecting a major catalyst later in the day or week. Before I show you the setup I want to point out that it is important to know the average initial balance for the product that you are trading. I trade the S&P's E-mini futures. The initial balance for S&P's is between 4 and 11 points 65% of the time (the sample period goes back to January 2008). The more narrow the initial balance, the easier it is to knock it over. That is an important concept to keep in mind.<br /><br />The Setup:<br /><br />It is a very rare occurrence for the initial balance to contain both the high and low of the day. This is a key concept in this trading idea. As you watch the opening unfold you want to get a feeling for the direction of the market. A good question to ask yourself (I have this on a post-it note on my monitor) is "Which direction is the market trying to go and is it doing a good job attempting to go that direction?". Lets say the market gaps up off the open and retraces 50% of the gap (this is another trade I will review in a later post). The market then continues to surpass it's opening swing high and around 10:15-10:25 sellers begin to pull price down to the middle of the range. If at this point price is above the opening swing high, odds are good the initial balance will break to the upside. If the market cannot hold it's opening swing low however the reverse is true and the market is likely to fall lower out of the initial balance. Keep in mind that a narrow initial balance is easier to overcome! I don't have to look far back to find a good example, because this trade works almost daily! <br /><br />First lets look at an upside breakout:<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjy4iZTvbjpR3ZaEkJ4XxlDuwC7Dg7sHwPWK-ufCdwzs5VF_BG_ffum9OLlkURlKECCBtM0bq69eW0_QSNo2gKjwLwanalbezQfU-S6SNSi9TiapPBNWUXOomkCrumT29BORJwu-1ngdljH/s1600/initial+balance+breakup.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 289px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjy4iZTvbjpR3ZaEkJ4XxlDuwC7Dg7sHwPWK-ufCdwzs5VF_BG_ffum9OLlkURlKECCBtM0bq69eW0_QSNo2gKjwLwanalbezQfU-S6SNSi9TiapPBNWUXOomkCrumT29BORJwu-1ngdljH/s320/initial+balance+breakup.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5618284809447928114" /></a><br /><br />Notice the narrow initial balance (5 1/2 points). Also note that the market has gaped up off the open. Price was able to hold it's opening swing highs and the expectation is now for the initial balance to break to the upside. Enter long before the breakout and keep your stop below the opening price. Monitor order-flow and conviction to determine if the trade is heading your intended direction. First scale out should be on the break to new highs, then you may hold the remainder of your position until initial resistance (assuming you did your homework and know where to expect initial resistance!). <br /><br />Now I will examine the opposite. This one is a little trickier so pay attention!<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_UonImFfVaPSbBjCBEVReYKspTaXhiJJn9Fqag_YrXSHn9rir9T634XHsb_amj84fTmu_UWZ2E7L2Ox753Itg9iXeltsjBdY77DLSr3EH6NuyAtPXictNrZmRCDnxsqxz2ljcwBOLvMrx/s1600/initial+balance+breakdown.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 289px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_UonImFfVaPSbBjCBEVReYKspTaXhiJJn9Fqag_YrXSHn9rir9T634XHsb_amj84fTmu_UWZ2E7L2Ox753Itg9iXeltsjBdY77DLSr3EH6NuyAtPXictNrZmRCDnxsqxz2ljcwBOLvMrx/s320/initial+balance+breakdown.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5618289646931117106" /></a><br /><br />Notice the gap up and again the narrow initial balance (4 points). At first glance you may expect the initial balance to break to the upside, but the fact that price could not hold the opening swing high in the 10:15 bar is a good clue that long conviction is fading. An astute trader would also notice the divergence in the cumulative delta. I would place my short on the close of the 10:35 bar with a stop above the IB high. As you can see the breakdown occurred shortly after! Again your first scale is on the breakdown and the second should be at a predetermined initial support level. On a day like this I would shoot for the gap fill at 1264.50.<br /><br />That wraps up this trade for now. I will provide a few more examples this week and then next week we will move on to a new trading idea. Once I have posted all my little "tricks" I'll start tying them together with annotated charts so my readers can develop a high probability trading plan of their own! <br /><br />I hope you found this post informative. Remember to follow me on Twitter, check out my Facebook, LinkedIn, and feel free to Skype me too! I would love to hear what you have to say, and how you use the initial balance in your trading. Please leave your comments below, and as always thanks for reading! <br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-70589680460245660602011-02-07T19:07:00.000-08:002011-02-07T19:39:40.893-08:0002/07/2005 UpdatesShould I update the blog more often?<br /><br />Probably. I've been busy though.<br /><br />2 college courses<br />5 year old daughter<br />Running my own business<br />Staying current with the 24/7 news cycle<br /><br />It adds up. <br /><br />By the time I'm done looking at charts, marking them up, reading news, watching webinars, and checking forums I just want to crash. And that's exactly what I've been doing.<br /><br />I don't even have time for the gym anymore!<br /><br />I'm going to work on my time management. I think I should be able to squeeze the blog in during the morning. It would be a pre-market trade plan. This should be more helpful to me as well. <br /><br />I am constantly refining my trade plan and I am very pleased with the results. I have to recommended two websites that have helped out my trading exponentially, both are great values as well. The first is eminiplayer.net. This site makes the stupid FT71 twitter stream look like child's play. You get a daily trade plan and target zones that almost provide two point rotations. The second is eminiwizard.com . The use of moving averages and mathematics make a powerful and simple system anyone can learn. Also, the chat room is hands down the best I've been in. <br /><br />I am not affiliated with either of those sites in either way. No one paid me to write this. I'm just giving you straight talk. I've made my fair share of mistakes in this business. I've blown up my account and gotten ripped off plenty of times. Traders International took me for 7k! <br /><br />So while you are waiting for my lazy @ss to update the blog, go check out those sites! Look for updates here in the near future. Make sure to follow me on twitter @INFECTEDTRADER. good luck and good trading.<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com1tag:blogger.com,1999:blog-2756437697166649520.post-73406368771172821182010-12-23T23:27:00.000-08:002010-12-24T00:30:55.828-08:0012/23/2010 Spotting a long trade with the volume ladder<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSjJiYqjzUH-HqKHtJTbbiP4L3D1yfhMfCMdMYwXr-YYdsfqXMjpjhs4roxKczJdFconMvjbhPf88t4Pr1q2aHGcSnENQ5p_VmG6x7eb8QvkkUfglwgGaz2PyDEK2U4X0lpDF07VaJLcK-/s1600/12-24-2010.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 180px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSjJiYqjzUH-HqKHtJTbbiP4L3D1yfhMfCMdMYwXr-YYdsfqXMjpjhs4roxKczJdFconMvjbhPf88t4Pr1q2aHGcSnENQ5p_VmG6x7eb8QvkkUfglwgGaz2PyDEK2U4X0lpDF07VaJLcK-/s320/12-24-2010.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5554162979484252242" /></a><br /><br /><br /><br />Hello Trader,<br /><br />Its been a boring holiday trading week so I had plenty of time to prepare this blog post. I have been using the volume ladder more often in my trading to spot entry and exit points. This post will describe my method by outlining a long signal from yesterday's trading. I haven't been trading the market much because of the low volume and practically nonexistent volatility. In fact on a side note, I would be buying puts to hedge any long exposure you might have because protection is dirt cheap right now. The VIX had traded as low as 15.50 this week!<br /><br />Getting back on topic now... In order to learn how the volume ladder works I read the thread at BigMike's Trading Blog, and watched the seminars. Then every night I looked at the swing lows and highs and examined the volume ladder during those time frames. What I found was exactly as described in auction theory books such as James Dalton's <span style="font-style:italic;">Markets in Profile</span>. <br /><br />For those that haven't read the book or aren't familiar here's a brief (and rather crude) example. First you need to see Price acting as an advertising mechanism and the merchandise on sale are ES contracts. Now imagine an ES contract as a reposed Ferrari at auction. When the car comes up for bid they start at 50k. At first, everyone's hands go up because it would be a steal! As the auctioneer keeps blurting out higher and higher prices, fewer hands remain in the air. The auctioneer, talking faster and faster edges the price up to 150k, and there are only ten hands remaining. 200k he says frantically, 3 hands. 250k! He shouts as his face turns red. Down to 2 bidders. 275k! He screams. SOLD! <br /><br />That last guy got the car. But what if the auction didn't end there? If it kept going what do you think would happen to the price? Furthermore, lets say there were a million Ferrari's up for auction. If this was the case (as it is) then the cars would sell for the highest price people are willing to pay for them given the laws of supply and demand. In other words, there would be a balance. <br /><br />The market works in a similar fashion. If it is not trending it is trying to find a balance. Part of our job as traders is to find that last guy willing to buy or sell, and take the other side of his position. The theory being that price will return to the balance where the most contracts where traded and likely to the opposite end of the range (where the most hands are going to be up).<br /><br />Looking at the volume ladder will show this theory in action. First observe the tick chart on the far right corner of the image above. You can see that buyer's responded to lower prices at the support zone (zones are provided my eminiplayer.net)at around 2:23 PM EST. An aggressive trader would try to fade the extreme but a move conservative trader would likely enter on a pull back. Let's assume the latter. You can see in the bottom panel of both charts that cumulative delta continues to improve as price pulls back to the moving average. At first price seems to find support at 1250.75, but how do we know to take a long?<br /><br />Let's look now at the volume ladder on the left. 1250.75 is the dash blue line. The fist test attracted 162 contracts, which you can see in the bottom left box on the ladder. The second test only 100 contacts were sold at the bid, AND a huge block of buyers stepped in. They picked up 2,169 contracts at the ask. That's your first clue. The third test only a mere 110 contracts sold at the bid. You can begin to see selling drying up. Price responds by moving higher and the cumulative delta continues to improve leading into the fourth and final test of our level. On this last test of 1250.75 you can see that ONLY 3 contracts traded! Flashback to our Ferrari auction.. The guy that sold those last 3 contracts is the winner of the action. <br /><br />Now can you see how to spot when selling is drying up? Fewer and fewer contacts trade at that price (fewer hands going up) until the selling (or buying) just shuts off. The entry on this trade could have been 1251 with the first target at the Volume Point Of Control, where the most trades took place. That level I marked with a white arrow is 1252.50. As you can see the contract did trade back to that level, in fact slightly higher. This quick scalp could have netted you six ticks or $150.00 on two contacts. Not bad for 15 minutes of work!<br /><br />In the future I'd like to do more of these posts. I have found market profile and auction theory to be a huge help in my trading. I will continue to use the blog to document my learning and share setups and ideas with everyone else. Thanks for reading, I appreciate any comments and I love to connect with fellow traders so feel free to email or Skype me. I hope everyone has a safe and Merry Christmas and a Prosperous new year. Take care<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-7189962417132460582010-11-16T19:53:00.000-08:002010-11-16T20:18:12.605-08:0011/16/2010 Highlighting some set-ups<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3sLBhNIJRcS0J3ziscrVmDkPDZ-isggh1TUFTqNGfEDsI1aDUpGJ6SS8Q5k8Fj0YZ6dloQZquhhJIJXflAUFwIjEm5N7fcqmveRCHrVdmfqMTQwt2RzIFq1HM4cN9USoy2fKexEWMJd7j/s1600/11-16-2010.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 294px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3sLBhNIJRcS0J3ziscrVmDkPDZ-isggh1TUFTqNGfEDsI1aDUpGJ6SS8Q5k8Fj0YZ6dloQZquhhJIJXflAUFwIjEm5N7fcqmveRCHrVdmfqMTQwt2RzIFq1HM4cN9USoy2fKexEWMJd7j/s320/11-16-2010.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5540368164339457426" /></a><br /><br /><br />Good evening traders,<br /><br />I just wanted to highlight some simple setups on the ES that occurred today. These are as much for my reference as they are for yours. <br /><br />The first trade marked on the chart was a nice short trade that you had to be quick to catch in real time. Price rebounded off support early but was unable to continue higher. The cumulative delta showed buyers drying up and then sellers taking the reigns. <br /><br />The next marked trade is a long. You can see the big spike down in sellers and then buyers begin to enter the market again. This would have been an aggressive trade considering the steep down-trend at the time. If you waited you got a safer entry the second time around.<br /><br />The third marked trade showed divergence on the delta and some strength showing up in the Stochastic. This was a textbook trade. If only I wasn't at the dentist, I would have been a few $100 richer!<br /><br />The fourth marker isn't as obvious as the last three. Sellers did enter the market but that wasn't as clear on the Delta. I took this trade because the entry at the time was a low volume node and the stochastic was overbought. The volume point of control was below us and this area had been support earlier in the day. <br /><br />The fifth and final marker was pretty straightforward. Divergence on the delta and stochastic. I tweeted my entry at 1173.50 live. It was a sloppy entry and the trade moved against me 4 ticks right off the start. As a result my confidence was a little shaken and I cashed out for 6 ticks. Stupid move in hindsight. I left 4 points on the table. I don't feel bad about it though because my trade plan is to be finished by 3:30 EST. So, that's 6 ticks I wouldn't have otherwise gotten. <br /><br />Sometimes its OK to break the rules, as long as you know you are doing it and adjust your risk accordingly. <br /><br />I hope these set-ups help you in your trading. Thanks for reading the blog and following on Twitter. I like getting emails from people and don't mind helping out other traders. If you need an indicator for NinjaTrader, or something explained just shoot me a message or Skype me. I'll do the best I can. I don't consider myself a pro by any means, but I believe communicating with other traders is a great way to learn. Do you agree?<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-43284493765260271362010-11-09T19:53:00.000-08:002010-11-09T20:24:53.639-08:0011/09/2010 EminiPlayerZones Review<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHjMbaOuWktfGk-Kn4r1UjVLQQcEy0ZoYNSIR5Y8POc8KQt-oXXNyxwaeY2BB6JTPgRZLjxTEBz-9C7oEwPq19JjZQW4fOccCzZaZNdpI9JiQNzgU4nsTff-BZ87tf-Zg7uRQCWyqGtlkq/s1600/11-9-2010.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 224px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHjMbaOuWktfGk-Kn4r1UjVLQQcEy0ZoYNSIR5Y8POc8KQt-oXXNyxwaeY2BB6JTPgRZLjxTEBz-9C7oEwPq19JjZQW4fOccCzZaZNdpI9JiQNzgU4nsTff-BZ87tf-Zg7uRQCWyqGtlkq/s320/11-9-2010.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5537772280612688978" /></a><br /><br /><br />Good Evening Traders,<br /><br />The chart above is today's five minute ES. I added the Emini Player Zones to the chart. You can get these zones at www.eminiplayer.net. I have been a subscriber to the service for about two and a half months now and I really like it. Along with the player zones, members get a daily trade plan and market analysis. For $50 bucks a month. Can't beat that! <br /><br />Today's priec action was a much needed pullback. On the 60 minute chart ES had been poking above its top Bollinger band since Friday. That kind of momentum can not be sustained for ever ($600 billion QE or not)!<br /><br />My trades Today were so-so. I missed the morning sell off but managed to get a good long from 1217-1219. the Initial Balance low was a great entry for short but I was waiting for price to continue higher to the VPOC, which at the time was around 1220.50. I was late on the entry with a short at 1216 and covered at 1214. I took a long at 1212.75 right at support zone and sold at 1214. I was expecting more downside but it was time to leave the screens and pick up my daughter so I missed the final swing low, but you can see it lined up well with the EminiPlayer support zone. <br /><br />My personal Opinion is that the pullback is over for now. We have $160 Billion in POMO coming in just the next few weeks. The "buy the POMO days" trade has a level of complacency about it that I find astonishing. By now everyone has seen the statistics, the market has made the vast majority of its recent gains on these days. If the pull back is not over and we get another sell off tomorrow I'd expect the Gap at 1197.25 GAP to be a good target. What would be really cool is if this whole move up was just a giant fake out and the market fell back down into the 1179 balance area! That's highly improbable, but a man can dream...<br /><br />Have a good night everyone and thanks for reading the blog. Click the adds please to help me out. You can follow Eminiplayer on twitter @eminiplayer and me @infectedtrader. Good luck tomorrow,<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-29916608905780348782010-11-04T15:31:00.001-07:002010-11-04T15:33:29.580-07:0011/3/2010 Not much to reportSorry to readers of the blog. I know it has been getting neglected lately. I plan to do updates more often once life cools down. You can still follow me on Twitter @infectedtrader every day . See you all soon!<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-79606216259099572412010-10-21T17:36:00.000-07:002010-10-21T17:56:31.455-07:0010/21/2010 Failed AuctionHello traders,<br /><br />Today was a failed auction. That means that prices ticked slightly above previous high's and then reversed. This is very bearish and will likely send us back down to the bottom of the recent trading range. I'm not going to rule out a move to the low 1140's in the ES. This scenario will be even more likely if price Breaks below 1155.00. <br /><br />The number one thing supporting this market is the "Bernanke put". There are six more POMO auctions to be conducted by the FED in the next 6 weeks. A recent article I read on Zerohedge.com said that the FED is actually running out of bonds to buy! Traders I have been talking to say that quantitative easing 2.0 isn't going to be announced until after 3rd quarter GDP numbers. In my mind its a done deal though. Most traders believe that the expectation of more liquidity has baked in about 50-100 points in the S&P's. That kind of market drop during election season would be a nightmare for the ruling party. Keep that in mind.<br /><br />Overall the market behaved as I expected today. following the levels I outlined yesterday. We topped out at 86 and found support at 67. The latter being the mid point of yesterday's rage and the the weekly range dating back to the 11th of October.<br /><br />My trading today was poor. I took one long trade this afternoon buying one contract at 77 and another at 76. Price moved to within one tick of my two point stop before reversing. I was lucky to get out of the trade with a profit. My entry was horrible and I did not have the proper feel for the market today. I was supposed to be studying for my mid-term exam in Strategic Management and just wanted to make a quick profit. After I took my profits I shut it down for the day and hit the books. In the book Trading in the Zone Mark Douglas says "When in the zone trade, when not, Don't". I think that book paid for itself today. Good luck tomorrow traders, and thanks for reading. <br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-23388934560499086152010-10-20T17:47:00.000-07:002010-10-20T18:47:03.810-07:0010/20/2010 Up Auction In Tact<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBplGr_33H17RjCFOUZKGaC3s8mITENFrtUBeYfOD6Dc-K4__iLYHq1h00QoN9fzSAPaIFA-aX9lDuTiQVAxw_gwo7I63o9q_89l_qXW29AX-k5gqYoK1hRdSmzXiKxJ39Zfc0GJ4HL-Nr/s1600/10-19-2010MP.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 175px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBplGr_33H17RjCFOUZKGaC3s8mITENFrtUBeYfOD6Dc-K4__iLYHq1h00QoN9fzSAPaIFA-aX9lDuTiQVAxw_gwo7I63o9q_89l_qXW29AX-k5gqYoK1hRdSmzXiKxJ39Zfc0GJ4HL-Nr/s320/10-19-2010MP.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5530309914213552226" /></a><br /><br /><br />Good evening traders,<br /><br />First let me preface this article by saying that I am not an expert in market profiling. This blog is very much about me learning and I learn best by writing things down and applying them in real time situations. <br /><br />The chart above is for the last two trading days with market profile attached. I used the free GomiMP indicator to create these charts in Ninja Trader. You can find the indicator in the Ninja Trader Forums. Low value nodes (LVN's) are marked with a red line, High value nodes (HVN's) are marked with a green lines, and the value area is between the two blue bars (VA). I highlight the point of control (POC) as the white bar on the profile. <br /><br />Yesterday's closing price was below value. With the gap up open this morning my immediate expectations were for buyers to bring price back up to yesterday's value area. The open went just as expected and yesterday's POC gave a good short entry. Profits could have been taken as we approached yesterday's LVN and the opening print. Buyer's once again stepped in drove price above yesterday's range. after a brief rotation the market resumed higher breaking out above yesterday's high. At this point long targets were the LVN from 10/18. That price was 1179.00 and provided numerous opportunities to short throughout the afternoon. The market closed towards the mid point of it's value range and I expect higher prices tomorrow. <br /><br />Some areas where I would like to do business on the buy side tomorrow are 1169.00-1171.00. There is a confluence of today's value area low, the LVN's at 1169 and 1171, and yesterday's POC should dry up the selling. <br /><br />Judging prices above is a little more tricky because I have to rely on other people's charts. I do not have data back to the beginning of May. If any readers have tick data back that far back please feel free to donate it to me! From what I can see (posted on chart.ly and other sources like twitter) there is resistance at 1186 area and an open gap from May 3rd at 1089.50. Those would be area's for me to take profits on long positions and possibly initiate a short. <br /><br />Like I said at the beginning, I'm not an expert on Market Profiling. I am reading, learning, and applying what I already know. The blog will help me keep tract of my progress and add more transparency to my trading. I post live trades on twitter. They are not recommendations to buy or sell anything. Thanks for reading the blog. Please help me out by following the blog and clicking the adds. It only takes a second. Good luck tomorrow<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-77069578501601848472010-10-19T20:05:00.001-07:002010-10-19T20:25:12.222-07:0010/19/2010 Market Notes For TomorrowHello again traders,<br /><br />I am going to jot down some thoughts for tomorrow before bed. First of all I expect it to be a slow day. we have no econ news and after a big move like today's the market tends to balance within a range. speaking of range we are near the bottom of the one that has been forming since the beginning of October. <br /><br />Again the bears are out in force. On the financial entertainment TV (CNBC) talking their books. The bears have the whole mortgage putback/fraudclosure thing going for them and today's news concerning the NY Fed & others suing Bank of America adds some fuel to the flame. However the bulls have the possibility of $100 Billion a month of quantitative easing in their corner. Personally my bet is with the bulls! $100 billion a month is a lot of money! And we all know that somehow these banks will weasel themselves out of this mess. They managed to do it every time I don't see how this will be any different. Just play the end of the world card again and they can get whatever they want! <br /><br />Now as I was saying... we are towards the bottom of the recent range and we should get a little churn in the upper 1150's and the 1160's. I would like to short the 1169-71 area on first touch and if price can get over 1176.00 it would be a major victory for buyers. <br /><br />On the downside we don't have much more meat on the bone. I'd buy yesterday's RTH low if prices get that far but I doubt we'll get that test with practically no catalyst. It would be a great buying opportunity if we did though. The 20 day moving average should be near 1156 and swing traders will be placing bets. <br /><br />Tomorrow is going to be about trading the extremes. I'll be watching earnings reports, the dollar (which had a big move last 2 days), and the VIX for clues. I am having a good week and I am looking to preserve profits. Good luck tomorrow everyone.<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-90906143915702492852010-10-19T16:37:00.000-07:002010-10-19T17:05:41.539-07:0010/19/2010 Market Delta vs. Investor RTGood evening traders,<br /><br />I have been having a lot more success lately. My win percentage is over 70%. I'm sure its just a luck streak, but I think I owe a lot of my successes to implementing market profile and auction theory in my trading. I purchased the book "Markets in Profile" and signed up for eminiplayer.net. I have added the Gomi delta and market profile indicators to my charts in Ninja Trader and watched about a dozen webinars on market profile in the past week. My take: You could recognize all the patterns, memorize a bunch of setups, have $5,000 dollar indicators, but its all worthless if you don't understand market profile.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjS9J77fDzH1TMYrdgLBCM1lA0mcLOvw1Ypc91rrOh8sKeCtwMS5Oj4IYcDJdftfEpxblHi-g2LeVb-kJaAL-6KL1kx99zGosz7hig04AOFnpAG3u15bGXo-cei9g-aw_WUJK1SxCt6ho50/s1600/69105_854332533733_14229573_45856400_1931306_n.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 232px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjS9J77fDzH1TMYrdgLBCM1lA0mcLOvw1Ypc91rrOh8sKeCtwMS5Oj4IYcDJdftfEpxblHi-g2LeVb-kJaAL-6KL1kx99zGosz7hig04AOFnpAG3u15bGXo-cei9g-aw_WUJK1SxCt6ho50/s320/69105_854332533733_14229573_45856400_1931306_n.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5529911511335294834" /></a><br /><br /><br />Well now I'm trying to take things to the next level. I am prepared to invest in a new market profile software to run on a new computer that I just added to my setup. I have narrowed it down to Investor RT or Market Delta. Anyone who reads my blog and has one or the other please comment on your experiences and help me decide. I also created a thread over at <a href="http://www.bigmiketrading.com/elite-circle/6070-investor-rt-vs-market-delta.html">Big Mike's Trading Forum</a> . Right now I'm leaning towards Investor RT and DTN IQ feed for data. I'll write some brief market commentary later. After my little one goes to bed. Enjoy your evening everyone, and thanks for your help.<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com4tag:blogger.com,1999:blog-2756437697166649520.post-17877147676888777392010-10-11T19:45:00.000-07:002010-10-11T20:20:53.936-07:0010/11/2010 Range DayGood evening traders,<br /><br />Bloggin from the couch tonight cause of my sprained ankle. today was a range day by all measures. I wanted to due a Range day blog post cause I haven't done one since this blogs inception. <br /><br />Here are some of the dynamics of a range day. I ripped them off from Brett Steenbarger's blog <a href="http://http://traderfeed.blogspot.com/2010/01/identifying-dynamics-of-range-day-in.html">Traderfeed</a> Hopefully he doesn't get pissed but if he is honest about helping people learn to bank coin in the market then he shouldn't care about my rinky dink blog biting his material. Its actually really good stuff and I want to catalog it here for my own reference. Lets see what Brett has to say ...<br /><br />1) Advancing and declining stocks running close to even;<br />10/11/10<br />Advances 1,678 (53%) 1,243 (45%)<br />Declines 1,383 (43%) 1,421 (51%)<br /><br />2) Price oscillating around a relatively flat volume-weighted moving average<br />10/11/10 <br />ES futures mid point was 1162.50 until the final 15 minutes <br /><br />3) Mixed performance--no distinct themes--among currencies, rates, and related asset classes;<br />4) Mixed performance among stock sectors; Today's heatmap shows these two points perfectly<br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMc27F4gETu1BBx4Re7BWU-fcd6NROnNxs7cVpPlnz6QWtw_zdE31-MAL_hxMbgGkusjQridxB1NkA5TqyriyRe3W6yIyEEN-xKpxuNF98QwEkKNBDaBULg-YoT_1Mxq1sP2bODncbQFTh/s1600/101110.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 290px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMc27F4gETu1BBx4Re7BWU-fcd6NROnNxs7cVpPlnz6QWtw_zdE31-MAL_hxMbgGkusjQridxB1NkA5TqyriyRe3W6yIyEEN-xKpxuNF98QwEkKNBDaBULg-YoT_1Mxq1sP2bODncbQFTh/s400/101110.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5526990916980034466" /></a><br /><br />5) Reduced volume on the day. <br />10/11/2010 102,731,872 SPY traded. vs average volume of 200 million.<br /><br />A few more things I wanted to say about range days is that the VIX is usually lower or muted and so is options volume. Both of those attributes appeared in today's markets. Also price should end at or near flat for the day. <br />10/11/2010 S&P gained .01 % today . 'nuff said!<br /><br /><br />I hope this post will help your trading. Bookmark it if you have trouble trading these types of days. My hope is that traders out there become better by sharing though sharing of ideas and giving up some time every night to help out the community. Thanks for reading!<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-89649782605755375932010-10-07T18:03:00.001-07:002010-10-07T18:21:46.261-07:0010/07/2010 NFP report previewGood evening traders!<br /><br />You all get an exclamation point today :) because tomorrow is the non farm payrolls number. One of the biggest econ reports of the month. Goldman Sachs says the number will be -50,000 jobs with a .1% rise in unemployment. would that be bad? good? who knows ! A bad number could mean more QE (quantitative easing) or a good number would mean QE is working and all will soon be well. anyway you cut it I'm willing to bet the market goes higher. Its really just a crap shoot though! I will play the hand I'm dealt and you should do the same. In the meantime I'm going to construct a few scenarios.<br /><br />First is a bad report. In this case I'll prefer shorts down to 1134.50 where we have a gap fill. we may get a pause at yesterday's low and again around 1141.50. I'll try to do business at those levels <br /><br />On a good report we could break over today's high in which case I would be less likely to take longs given the run up in the markets. I would try to short 1168.00 and if I fail there then cover and re-short at 1173.00 where we have very significant resistance on a composite profile dating back to April. <br /><br />The last scenario involves the relationship between the Dollar and stocks. Traders please consider this: The Dollar and SPY are nearly a perfect inverse correlation the past 3 weeks. One up 2% one down 2%. A poor NFP number may stun the Dollar and send stocks higher. Or the inverse, where the Dollar strengthens on good numbers but stocks fail to rally because of the Dollar strength. The more I consider the recent correlations between these two markets the more I find this scenario to be the most likely for tomorrow. <br /><br />The plan:<br /> Pay close attention to the USD and VIX to see if the risk trade is on or off. <br /> Wait for markets to settle after the data has been released.<br /> Trade where you want to trade, don't force your will on the markets.<br /> preserve capital! <br /><br />Have fun and good luck tomorrow !<br /><br />-Nate <br /><br />Also I am on Skype now so if you want to chat send me an email, I'd love to hear from you.Nathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-21069891764675997562010-10-06T19:48:00.000-07:002010-10-06T19:59:51.924-07:0010/06/2010 Reflation TradeGood evening traders,<br /><br />I mentioned two days ago the reflation, inflation, quantitative easing trade will push the markets higher. I underestimated the amount of money the Fed would be buying. I learned today the Federal Reserve is now the second largest holder of US government debt. They are monetizing $11 Billion of bonds a week ! <br /><br />Stocks will go higher but physical commodities will certainly out perform. watch gold and oil especially. They have new gold E-mini contracts that allow you to buy 10 ounces of gold at a time. That's way to small for hedging. The speculators will flood the gold market and major dislocations will begin. A'la $150 a barrel oil .<br /><br />Gonna make for some good trading this fall...<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-53185030527881045242010-10-04T18:19:00.000-07:002010-10-04T19:12:23.520-07:0010/04/2010 More downside to come?Good evening traders,<br /><br />In response to the title of this post... I doubt it! Well at least not much more. We still have an open gap at 1120.50 and I wouldn't be surprised to see that get filled in the short term. We need to be vigilant of outside market factors when we trade. This could be the regulatory environment, overseas conflicts, anti-business legislation, and moves by the federal reserve. We are all familiar with the the first few but its the last one, the Fed, that remains a mystery to many traders.<br /><br />While the Federal reserve has no authority to operate in the primary markets, (such buying $USD futures, or $SPY options), what they do during market hours can still have a huge effect. How huge? Consider that we recently learned one "fat fingered" trader at Wadell and Reed caused the "flash crash" with a mere $4.1 Billion in E-mini contracts. Now consider that the Federal Reserve will buy in at least $800 Million worth of bonds from the heaviest part of the yield curve tomorrow (9/30/2016 – 8/15/2020). Banks want to trade in their crappy yielding paper in favor of the higher yield in stocks. A good auction might push close to $2 billion worth of capital to primary dealers. Add broad index ETF buy-ins seen at the beginning of the quarter, and I believe big money will be chasing stocks higher.<br /><br />Complacency is key here. Wait and watch the market 5 minutes following the close of the auction. I have seen this market run up EVERY POMO DAY this year. While I don't have the numbers in front of me, I know another blogger actually crunched them and that statement is statistically in my favor. We hear everyone say "This time is for real" "Sellers are in control" or my favorite "We are in wave 4 of a 1,3,5 ABC pattern". Just be vigilant. Its stupid to fight the Fed, the banksters, and all those who have a vested interest in the market going higher. <br /><br />We have a decent Econ Calender this week. Culminating with the Non-farm payroll report. I'm excited to trade it. Make sure you are following the blog, and on Twitter, and that I'm following you too. Email or comment below and as always, Thanks for reading!<br /><br />-Nate <br /><br />P.S. Here is the link for the Outright Treasury Operation Schedule <br />http://www.newyorkfed.org/markets/tot_operation_schedule.htmlNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-59144071528503421042010-09-28T16:24:00.000-07:002010-09-28T17:28:22.840-07:009/28/2010 Over Trading<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMVdiPUWnAebihOYoqw2K-5GnRdwenpk3n0sw9N-C9DApFQFbpv3oKJ5Kr6tc4b6m-KYwFyVlSGYsBCZ9xrvQVZJ8ZQiYgsgT-NEEyt3gj5uYX4bkuOQHsYRl62HlwL2EiPSznCsySvQSC/s1600/9-28-2010.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 304px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMVdiPUWnAebihOYoqw2K-5GnRdwenpk3n0sw9N-C9DApFQFbpv3oKJ5Kr6tc4b6m-KYwFyVlSGYsBCZ9xrvQVZJ8ZQiYgsgT-NEEyt3gj5uYX4bkuOQHsYRl62HlwL2EiPSznCsySvQSC/s400/9-28-2010.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5522115488550080306" /></a><br /><br /><br />Hello Traders,<br /><br />Hope you all had a profitable day! I walked away with a measly 10 ticks. However I screwed up big time. Wondering why?? Because I over traded. Half of my profit was eaten up by commissions. I realize my mistake though. I'll work in the future to minimize my trading by only taking trades at pre-defined, low risk areas. Let's go over the trades, the losing ones are circled in white. <br /><br />On the first losing trade I tried to fade the initial support area at 1037.50 and support failed. I took a 6 tick loss and looked for another long around the Globex low at 1131.50. The counter trend move netted me a point and I went running before consumer confidence came out at 10:00am EST. I completely missed the long off of 1128.75. That would have been the trade of the day! During my next two trades I was fighting the Federal Reserves POMO auction. I kept trying to fade previous support levels but the money printing machines were too much to handle and kept driving prices higher.<br /><br />In the afternoon session I expected price to roll over. I took a short too early and got stopped out for another 6 tick loss. After the double bottom that formed I should have known better than to short. Then, of course, price reverses and goes my direction. I was not very happy about that trade. On the next trade I lost a point because of another missed entry. Except this time I wasn't going to let the market run away without me. Once enough shorts were on board they squeezed them hard, giving me my best gain of the day, a 2 pointer. I got out before the 1140.00 IB high only to watch price continue to move in my favor. Everyone was eying 1144.50 as a potential target and momentum carried the market to 1146.00 which was the overnight high. I got short at 1145.25 for another quick point. I didn't want to overstay my welcome with 10 minutes left in the cash session. <br /><br />Over trading is just plain dumb. I know better than to be making that kind of mistake. I'm very disappointed in my trading to say the least. Some levels to do business tomorrow are the Globex high from Sunday 1149.75, and the open gap at 1147.75 on the upside. If prices fall below 1136.00 I'll look for longs around today's low 1128.75 and then the open gap around 1120.<br /><br />Good luck tomorrow everyone!<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-37845989720680418082010-09-27T17:48:00.000-07:002010-09-27T18:10:52.176-07:009/24/2010 One Trade One LossGood evening traders,<br /><br />Hope you all had a good trading day! I took one trade for a loss of a point. Tweeted it too. Being focused on my Quant Methods class wasn't helping so I just left the screens on and watched. <br /><br />You ever just watch your DOM sometime? It does some really wierd stuff from time to time. Orders will just pop up, then quickly go away. I'll watch the contracts on the BID go from 4k-12k+ in about 3 seconds then go away again! Comments on that topic are welcome<br /><br />I'll be trading more tomorrow and Wednesday because school is out until Thursday night. Tomorrow I'm watching the 1130-1132.00 price range for buyers to step in. That level puts us at the mean of the volume profile from last week. It also lines up with a few daily trend-lines that could get some swing traders on our side. Until we break out of accepted Value Area I'll be adding to my current profile for analysis. Good Luck tomorrow !<br /><br />-NathanNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-26399547399148963192010-09-24T16:46:00.000-07:002010-09-24T17:08:20.870-07:0009/24/2010 I Had A Good Day<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJbxy5GedNE0n2pKfwKNVhafbDhUWj_9EwzXCQRjiNebQOp4wEYcTxT6O0S6yUC6tPYhpf4qo40IOXeD6Y5c6HmOnsfgvcrw4XFlG7242_e6w-9qCydkhJsc-XHn-mUwiMDsY3Ou1aP5zj/s1600/09-24-2010.bmp"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 219px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJbxy5GedNE0n2pKfwKNVhafbDhUWj_9EwzXCQRjiNebQOp4wEYcTxT6O0S6yUC6tPYhpf4qo40IOXeD6Y5c6HmOnsfgvcrw4XFlG7242_e6w-9qCydkhJsc-XHn-mUwiMDsY3Ou1aP5zj/s400/09-24-2010.bmp" border="0" alt=""id="BLOGGER_PHOTO_ID_5520636250269818386" /></a><br /><br /><br />Good Evening Traders,<br /><br />I had to get at least one blog post in this week! I have been super busy studying for licensing exams, not to mention my normal course load, and my 5 year old daughter! I still take classes at University of Pittsburgh twice a week at night. That's one of the great things about trading; You have the free time to do what you want! I don't want to get too confident sounding so lets get to the trades.<br /><br />The first long hit the target almost within 5 minutes. I was feeling confident and shorted initial resistance and gave a point back immediately. that's when I realized it's going to be a trend day and shorts are counter trend only. I like to lighten up the counter trend positions and look for shorter price targets. You can see I only traded one contract on my next two short positions. I also closed them out for one point. So then you are asking why did I trade 4 cars on the final trade?! Here I'll tell you; It was the weekly high and I had been waiting all morning to short it! After that big winner I was feeling pretty pleased with my performance. I took home $512.50 before commissions and junk. <br /><br />Just to critique myself on a few things. First, I should have taken more trades with the trend today, and second I feel like I over-traded. If you have any other critiques please feel free to post a comment. Also take a look at my twitter posts (bottom right corner of the blog). I usually tweet my trades before I make them, however sometimes I'm too focused on the charts to play that game. Twitter makes me more cautious. It makes you think twice. I ask myself "Is this a trade I want to tweet?" and if I'm not feeling it, then I usually pass. <br /><br />I'm off to see Wall Street 2 tonight. I hope you guys enjoy your weekend. Please follow me on Twitter, Facebook or where ever it is you choose to express your narcissism! And as always, thanks for reading! <br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-19981345022899460812010-09-13T19:36:00.000-07:002010-09-13T19:48:48.497-07:0009/13/2010 One Trade One Target<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9H99_Xrjm5yWk7KG5PHgoggWnPGyycRh9MnJy8iL24k_EUCuVYqF5JzDkUEmGsGjhlWz_M8tYJSHoxbQni00pfulnWEdFO1vhnjDtKqcUs-wUsfHVuYCAzJGdwYsyHFzGHcD-58B5SX43/s1600/9-13-2010.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 219px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9H99_Xrjm5yWk7KG5PHgoggWnPGyycRh9MnJy8iL24k_EUCuVYqF5JzDkUEmGsGjhlWz_M8tYJSHoxbQni00pfulnWEdFO1vhnjDtKqcUs-wUsfHVuYCAzJGdwYsyHFzGHcD-58B5SX43/s400/9-13-2010.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5516594371855876930" /></a><br /><br /><br />Good Evening Traders,<br /><br />I have been busy studying for my licensing exams so I haven't been able to post much lately. This morning I traded the September contract. Some traders were already using the December contract but I like to wait to switch because there isn't enough data to calculate my indicators properly. <br /><br />1124.00 was a resistance area I identified in my research last night and given the lack of responsive buyers at the open I was positive it would be a great short. Price had moved to the top of the regression channel and the stochastic was way overbought. When 1124 was rejected I initiated the trade. I also tweeted it LIVE on my twitter account @infected1172.<br /><br />I'll be back on trading tomorrow morning so make sure to follow along and maybe we can make some money together! <br /><br />-NathanNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-9798609166233366282010-08-31T20:45:00.001-07:002010-08-31T20:46:32.507-07:008/31/2010 More To Come...I am starting a new job tomorrow. This means I should have more time to devote to trading and the blog. Here's hoping ! <br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com1tag:blogger.com,1999:blog-2756437697166649520.post-62591249553422146362010-08-24T04:47:00.000-07:002010-08-24T04:48:40.455-07:008/24/2010 COVER SHORTSGood morning traders. <br /><br />just wanted to make note that the target area for shorts 1050's has been reached. look to get a good price and cover shorts today. you can always re-apply any positions if the market breaks support. Have a nice day!<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0tag:blogger.com,1999:blog-2756437697166649520.post-79296621658283908102010-08-12T19:50:00.000-07:002010-08-12T20:26:47.379-07:0008/12/2010 Sellers now in control<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0sMgReySkr72UD-4aATszkl6g4Up0CBcIhp5vCN_VASWuEqT9Uak4iXw1DeX5ve_NbwlZbBxHmFS46hqBgW1ns9so6B0TC-pb2zRyRy0QEOV4giSaiw2yed-Y4D3PV3bqTxBI50HccNE3/s1600/aug12th+daily.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 385px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0sMgReySkr72UD-4aATszkl6g4Up0CBcIhp5vCN_VASWuEqT9Uak4iXw1DeX5ve_NbwlZbBxHmFS46hqBgW1ns9so6B0TC-pb2zRyRy0QEOV4giSaiw2yed-Y4D3PV3bqTxBI50HccNE3/s400/aug12th+daily.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5504722725758120946" /></a><br /><br /><br />Good evening traders,<br /><br />Lets start this post by stating the obvious, sellers are now in control. Looking at the charts you can see the clear double top where I drew the red line. In previous posts I pointed out the 1128-1131 level for an upside target. Bernanke and our friends at the Federal Reserve had nothing good to say yesterday and now we find price reversing. And rather strongly. If I had a "trading magic 8 ball" it would say "all signs point to bears"! <br /><br />We have a heavy economic calender ahead, which means more choppy waters for the markets. Tomorrow we have Michigan Sentiment, CPI, and the all important Retail Sales. Each one is a potential landmine. We also know that GDP is going to be revised lower due to the massive trade imbalance. Those are the fundamental reasons for the markets to continue to sell off, now lets look at the technical...<br /><br />Tonight's chart is marked with horizontal support and resistance lines. Shorting rallies is the play now. Price has closed below the 20 and 50 day moving averages, lower Bollinger bands have expanded, RSI is now below 50, and the MACD has crossed it's signal line. Also note the MACD histogram is negative and volume has picked up confirming the move has a good push behind it. I would like to initiate shorts in the 1099-1105 resistance area which should coincide with 20 day moving average. My initial target is 1056, then if prices punch through that level I'll look for 1040. <br /><br />I want to add some comments on the structural deficiencies with the economy but I procrastinated in doing this post and its late now. Maybe tomorrow! Keep an eye on the key levels I noted above and follow along with my game plan. Maybe we can make some $MONEY$ together! Good Luck<br /><br />-NateNathan Stonerhttp://www.blogger.com/profile/00698468324291876573noreply@blogger.com0