Doug Green

Day 3 of daily trade blogging, no trades in the morning although I attempted one late afternoon for break-even. Very slow morning, zero pre-market volume and almost nothing in early morning either.

1. I was up early again today to do something for the day job. It looks like we could be heading for an A-B sequence with the B above the big triggers, but if it happens, it will take a while to form... Maybe the unemployement news at 8:30am will drive it. I'll check back around 8:30am...
2. It hardly moved with news. We're in a B long on the 233 chart, but everything else is still in an X. If we're going to get the A-B setup it will be after market open. Back in a bit...
3. Now at open, 1152 mx and macd are short but moving to long, 7500 is already long, 7500 small trigs are coming through big trigs, definite long bias, but will wait for A pivot and look for good B entry...
   • Post Market analysis shows I misread this. I missed a potential long, but one that wasn't perfect and a little riskier than I wanted for today, so no real harm. Chart on the left is the 1152 tick chart and one on right is the 7500 volume chart. 1152 was long at open, not short as I commented above during my trading. I think I was looking at the 288 chart instead of the 1152 (which I have positioned next to the 1152).
   • I've drawn a vertical blue line at the open and I've drawn rectangles around the mx and macd on both charts. Notice the mx line is blue and the macd background color is green on both. I've also drawn a box on the 7500 chart where the small trigs are coming through the big trigs.
   • When the small trigs come through the big trigs, this is a "jelly-bean" trade as named by John Tocho because on the original TradeStation charting package from DimensionTrader (traderusa.net), this looked like a jelly-bean. The Jelly bean at the balance line especially on shorter term charts is frequently a good trade. This was a potential long jelly-bean, but below the balance line and on a longer-term chart, and thus a little riskier.
4. At 9:34am we're hitting some long resistance at 1132, with 1:1 at 1131.75, zsr at 1132 and another at 1132.50, This would be a great place for the A pivot. Also the 1152 mx and macd have not turned long. I'm watching for the small trigger on the short term charts to roll and go short, and will then be looking for a good area of support to go long. The 7500 chart looks perfect, but the big triggers on the 1152 are still a little too high and wide apart.
   • Same misread as above, the 1152 mx and macd were already long, it was the short term 288 that was short.
5. At 9:44am we're still meanering at resistance area of 1132 but haven't formed an A yet.
6. At 9:52am we now have the A, but the big triggers on 7500 formed oddly, the long term mx and macd went short, and we fell through big trigs on 1152 so I passed on the B long I was looking for. My bias is actually short now. So the best thing to do is to wait for the next X or a C/F.
   • I've put a vertical line on the chart to the right to show the 9:52am time frame. Notice the small dot on the high of this bar. That dot indicates that we confirmed the A pivot on this bar. I've put a rectangle around the big triggers to show that they aren't smooth. What happened is price fell too fast and made the triggers malform. Another indicator that price is falling fast is that the price bars have pulled away from the small triggers. All these signals combine to tell us that there's too much downward pressure for the B to form where we'd like it.
7. At 10:03am we finally got a B long on both long term charts. But as these didn't occur at good areas of support I passed on it.
8. It's slow this morning, and I've traded for about 45 minutes, not seeing much setup, so I'm calling it a day again, no trades today.
9. I keep charts on one monitor while I do other work, and I try to keep an eye on the big picture throughout the day. If anything interested starts to form, I give it a second look. This afternoon, around 1:30pm on both long term charts we had an A pivot with a potential B forming near the big triggers, at the B projection, and at a zsr. We also had upper macd divergence which can act as resistance. The 7500 macd and mx were down and the 1152 macd was down, but not the 1152 mx. I took a chance on this B short at 1135. On the chart to the right I've drawn a vertical line for this timeframe. Notice on this bar the mx was down, but barely down, and on the next bar it turned blue. However, it went sideways for a couple bars, and in this time the 7500 mx went positive, the 1152 macd went positive, and the big triggers on both closed oddly. This all indicated a consolidation and potential continuation move upward. So I closed the trade at break-even.
   • I also drew an oval around where the big triggers weren't smooth. This occurred because of the rather steep upward movement from the A, and was an early indicator that this B was going to have difficulty forming where it should.

I've been conservative all week, and it seems that I"m not the only one. I'm tried to trade the long term charts all week, but volume has been so light, that the only descent trades have been on the short term charts. Fridays are traditionally slower. There is some pre-market news tomorrow so if we don't move with these, I'll either not trade, or I'll move to the shorter term charts. (Configurable news is drawn on charts to help me remember when it's coming out, with defaults to yellow highlight and red USD news only.)