J.T. 9-30-13 Fed Gov Shut Down?

The fed government's operation is hanging on a thread of Congress's action today.  Market gaped down on Sunday night. ES gaped cross its old gap again. Everyone is waiting for the final word if the gov is going to shut down by mid night tonight. Either way the shut down may be a short term event with big volatility. I will only focus on 1-2 weeks ES option positions since there are so many unknown events. Be prepared for a big swing and possible long expected pull back.

It's the quarter end too. My month end options are looking OK except 1660 put which is about 10 points away with 15 min to closing. It's a new event risk unlikely but possible. My exit out is set and ready to go in case a sudden move.

Well, everything for this week expired worthless as there hasn't no solution from Congress at the closing. I expect the short term down trend will continue and will handle it accordingly.

T.J. 9-27-13 Gap and Chaching Friday

The market has been really weepy. Yesterday's rapid rejecting low before closing  made it looked like ready to explore upwards. Then it made a small gap down early morning. It finally closed last Monday's gap below. I guess we are still waiting for Washington's budget deal. It's likely these politicians will kick the can down the road again with a temporary debt ceiling and budget solutions. I am getting tired of these irresponsible and inefficient process.

It's a profitable week for me, or more of a small recovery from last week's disaster. I am disappointed but have to pull myself up from the knock down. I was lucky to get couple of scalps from yesterday and today.
I expect a gap on Sunday if there is a debt ceiling deal over the weekend. A vote is scheduled for tomorrow.

I will start track and report weekly P/L to measure my progress closer.

T.J. 9-26-13 Same Pattern

Markets are often in the same pattern for several days. This week's pattern for ES has been sell at open, push up before noon and drop in the afternoon. It has been happening since this Tuesday. After recognizing it the more important issue is how do I plan my trade base on it. The trick is that one won't know when the pattern will change.

Well, at the last 40 minutes of closing ES bounced from a double bottom. ES is closed at 1692ish，the higher part of the CHVA. It's parked at a neutral of BBD/M. It could go either way tomorrow or the next few days. I guess people are waiting for Washington.

I tried a scalp of put 1670 at 75-55C and missed it because I moved the entry from 55 to 60c. A bad habit costed me $100 quick profit. I only got 1 scalp for Monday the month end contracts.

T.J. 9-25-13 5th Down Day

Market had another small down day. Every rally attempt got crashed. Vader tried to swing long and was hammered for 2nd day. It's unusual that ES pushed into gap zone but didn't fill the gap. I guess the market is still in a waiting mode. I had a spread of call and put. The put made money but the call didn't. It may end up break even.

I legged in a sell put of 1630 for 10/4. It looks safe as long as the up trend is in tack. I am also in a wheat call sell position. The trend is down for grains. I will add couple more positions if it pushes up further.

T.J. 9-24-13 Looking for Direction

It's a wild day. ES breached both overnight high and low again. It broke O/N low after open. I thought that we were going to fill the gap but it only got the edge of the gap and then popped. I later noticed that SPY actually closed the gap. It pushed through CHVN and PP of 1696 and up to 1701. It started drop after 2 pm and back to over night low again. The day ended up with a big doji. It looks like the market is waiting for Washington but there has been no news come out.

I exited a call of 1710 and put of 1670 just for precaution in case of the debt ceiling news move the market drastically. My SPY call and put are in place too but they were not well planed. They both are at 45 each side. I need to learn more about regular options.

T.J. 9-23-13 Trend Setting Monday

ES opened down for all day but was in a 12 point range. It tested Fed day's crime seen and closed right at it. It looks ready to test last Monday's gap. The debt ceiling is a cloud overhanging the market although not much news about it. Not many pro traders whom I follow talks about it. Does the market expect it will resolve it before the deadline or there is no major effect? E Health even popped 8% today like there is no de-funding of Obama Care. I exited partial of my e health position as it crossed my target.

I carried away a bit for these weekend decay positions last Friday. This week's 1670 puts are in danger if the gap gets closed at 1681. This was not my setup. I follow Twitter Veenmr1's trade which I broke my rule of " follow my rules and pick my setup=I own the market". I entered an order to exit the position to take off my risk and correct my mistake. Another rule breaker was that I entered 1660 9/27 puts for only $1.15 wanting the decay last Friday. My rule is no less than $2.00 premium except short term scalping. ES 1660 put hit $2.25 today which I added one. Be aware that changing habit is a process. It may take some tries to get it right. In the mean time I need to control risk to ensure that I can last long enough to succeed.

T.J. 9-20-13 Reversal?

I exited out my last losing position pre market at 2700 this AM. It would have been a wash if it wasn't quarter end options. ES came back to retest Wednesday's break out area. It was a slow grinding down in the morning and accelerated in the afternoon. The later drop may have something to do with the congress passed a bill that de-funding Obama Health Care plan. It looks like the debt ceiling battle is on in the next two weeks.

I entered some put options to fill next two weeks positions. I still was not patience enough on couple of entries. I lowered my entries a notch lower. A bad habit takes a lot to change. I will obey my rules to take stop if they come down to 1.5-2x against me. It actually will work out to reduce loss, b/o or profit when I take stop and enter new positions further out of money.  A lesson of three months profit should be strong enough to change my bad habit. Otherwise I won't be able to make it in this business.

T.J. 9-19-13 Disaster

The fate of this week's ES call selling was determined when the two gap up happened I didn't take any actions. I kept waiting for Syria and Fed meeting to change the direction, basically using such events to delay stop losses. The needed discipline hasn't become my habit and way of natural action. I thought about scaling out several times but didn't take any action. Like I haven't learned enough from last May's loss. I am still not a professional trader/investor yet judging by my behaviors. I was more of a hold and hope armature.

Today's  small pull back got me out some calls at the first target of 1721. I have 4 left at closing. I will close them out before bed time since it will close at 9am tomorrow morning.

I will manage the next two weeks positions tomorrow and start my recovery process. Be willing to take losses early and keep them manageable. This should be my last hold and hope. Otherwise I have no way of making it in this business! Am I willing to throw my four year effort away because I have no will of power to change some bad habits?

T.J. 9-17-13 Waiting Game

Market is holding up the day before Fed meeting ending tomorrow, the once a month event. ES push to half gap low last night and now has moved up 8 points or so in the upper part of yesterday's profit and above CHVN at noon. It looks like wanting to test yesterday's high. My hypothesis of last night was expect ES to fill the gap and parked at a neutral area around the break out point. Now it's more bullish than I expected.

ES closed near day's high again. I guess the big guys are expecting a positive outcome of Fed statement, plus they want a good quarter end. Or, are they going to build it high then drop it hard?

I will wait to see the direction after the announcement and Ben's news conference. I held my urge to enter any position today. Since it's Quadruple week and ES options would be close for trading at 9 AM on Friday, I have to exit my losing positions on Thursday. My exit strategies for this weeks under water options are, 1, wait until Thursday to squeeze out most of time value but risk of let premiums go much higher if the ES stay up after Fed meeting; 2, Exit them tomorrow before Fed meeting with a known loss figure but risk of a recovery if the market drops after the Fed meeting. My situation is similar to last May.

T.J. 9-18-13 Another Fed Day!

The anticipated tapering didn't happen. The fire work started rapidly right at the announcement. My thesis was pop and drop as it happened many times before. It didn't even have a retest of the break out area and went straight up for 20 some point. I couldn't come up with a good hedge strategy other than selling this week's calls at higher price. I didn't think of using SPY call nor sell 1690ish for hedging.

The bottom line is that I am still don't have a pro's discipline and mindset. I thought about reducing part of my call position this morning but didn't take action. Rather I was hold and hope. I know better but didn't enforce it. Now it looks like this week's loss may wipe out my last three months' profit.

T.J. 9-16-13 Gaps Again to the New High

After Mr. Lawrence Summers announced withdrawing from Fed chief's nomination on Sunday afternoon futures market gaped up over 1%. ES and NQ both reached a new high. All of my call selling are under water. It is a big lesson to teach me again whenever I am so sure of a market's direction and let my guard of risk control down the market will slap my hands.

At 3 pm today ES has had a 10 point range and it's moving very slow. My guess is that the market is cautions because the Fed meeting announcement is this Wednesday. My guess is the market will park at mid of a key level before Fed meeting. I will let my call sells of this week to decay for 1-2 more days in hope of minimizing the loss.

T.J 9-13-13 Chaching Friday

This week ended with a small profit due to the stops of 1680/1685. I summarized my mistakes in yesterday's T.J. Glad I took those stops. I hesitated but finally enforced my rules. Will apply the same rules next week.

 I entered a scalp put of 1630 to offset possible call stops for next week. ES closed at high of the day and may gap up again next Monday. I am ready to take actions after this weekend decay.

It's a process in learning discipline and risk control. I am making progress.  

T.J. 9-12-13 Over Confidence

I took stops for my 1680 and 1685 for this week at 1.5 to 2X. I am glad I did it regardless the prices are lower now. Although the prices I got was not as good as yesterday's. But I didn't act like a deer in the head lights not knowing what to do. In reviewing my serials of call selling last Wednesday, I made several mistakes.
1. Overly confidence: ES was at 50 MA and the old 8-15 gap had not been challenged. I was overly confident that ES would have tough time to go through these levels with Syria over hanging. I set my entry levels in Fib 50 and 62 area. I didn't expect there could be another solution for Syria and Friday's job report was below expectation. The market gaped up to cross the old gap.

2. Bend my rules. I don't enter orders on one side for three weeks out in one day. Because of the over confidence and my increase margin. I entered in orders with all three weeks thinking that was a once in a week time opportunity. A thought of this was wrong did come cross my mind but I ignored it. Actually I should wait for Thursday or Friday to place orders to get better decay.

3. Poor execution.  My order is set for $10 increments so I can have more protections. This time I did it in every increment next to each other.

Those mistakes cost my near $700 this week. It may go even more for next week's calls if the ES continue to move up.

Things I did well are:
1, Took stops unlike in May I waited for them to get assigned at higher cost.
2.  Hedged my lost from the other side which reduced my losses.
3. Mentally accepted my losses and hopefully learned from these mistakes.

T.J. 9-11-13 Don't Touch That Order!!!

ES had a very narrow range in bull flag overnight. My hypotheses were down if it break overnight low first after open. I thought it could do some back filling to close the gap especially ES didn't respect Fib 62 on the way up. It did break the overnight low first but hanged on the cliff of CHVA. I had my exit orders for 1680 and 85 site there for expected stop losses. When the prices got near my greedy and bad habit of moving orders took over. I moved my order from 5.25 to 4.75 below the options gap. Also moved my SIM target to below PP. ES tried several times but couldn't get to yesterday's low. It bounced up with 2 ticks away from my orders. It pushed up to officially closed 8-15's gap and touched Fib 78 line at 1687.5. It has not seen any major sells reaction at this level as of 2:55 pm.  My losses of this week's calls are doubled because I moved the orders two notches down. A bad habit costed me several hundred $s now. I will see if the Fib 72 level would hold as an resistance. Also today is the third day up. If we don't have a pull back by tomorrow, I will have to get out at a bigger loss since both orders are ITM now.

Wow, ES pushed up to 1688.5, the top of this CHVA at closing. It has been three days without any pull back. ES looks ready to get to a new high following NQ. I obviously forgot the pain I had in May when I was so confident that ES would not easily push to a new high without a pull back. Tomorrow may tell.

There has been no activities in grain front for me. I am waiting for USDA's report tomorrow. I will see the trend to confirm the day after tomorrow.

T.J. 9-10-13 A Gap to A Gap

I guessed it last night but thought it was unlikely a gap up over night. I don't remember seeing a gap up to fill a old gap down before. In auction's theory it indicates the market is not interested in this 1670-1677 area which is also a CLVA. Over night, China's better than expected data and positive Syria news pushed oversea market higher. Apple released its new I5s and I5c today. It's the same pattern that market buy it on rumor and sell it on news. My order on a pull back for Apple didn't get filled.

ES closed at 1682 in a CHVA. It setting ready to test higher end of this CHVA of 1688 area or could back fill the gap area. Pre. Obama's speech tonight may affect the direction of the market. It looks like the attack is delayed at least. I need to take my stop of 1680 tomorrow one way or another. I already hedged it with next week's 1635 puts.

T.J. 9-9-13 Expect Unexpected

Market opened higher this morning. My expectation was that ES might retest 50MA and last swing high of 1667. People would be better wait for Mr. Obama's speech regarding Syria tomorrow. It acted that way until the news of that Russian proposed having Syria's chemical weapon under international's control. Then market sentiment changed to a more bullish one. ES ended at 1671 firmly above 50MA and Fib 62RT. It positioned ready to take the gap zone tomorrow, or may be even a gap cross the gap? However, ES is at top of narrow BB. The bigger picture looks like a huge head and shoulder pattern. It could be a fake break out as it has happened many times before. Also it may go up there to close the gap at 1680. Bears then will be comfortably start selling again.

I entered several call sells based on my early hypothesis. It appears I was bit too early and weighted more on the bearish side than I should. I have more call sells than put sells right now. Get to remember that selling calls is riskier than selling puts. I have lost a lot more in selling calls. I need to work on reduce call side risk tomorrow.

I have two SPY weekly puts based on 50ma and Fib 62 today. Didn't think of using a spread to reduce my risk.

T.J. 9-6-13 A Wild Day

It was expected to be volatile but with a big twister of Putin's speech. The job number was less than estimated therefore the market pushed up as I anticipated that bad job number would be good news for the market. As it happens often a news of Putin talking about supporting Syria came out when ES was near its upper trend line. Everything started dropping immediately. It was a 25 point drop within 1 hour. Even in the panic selling market still respected key support levels. The drop stopped at 1639, a CLVN and BB4/L with last two days' open and close. It bounced immediately as I was expected it would stay low for a while. I didn't release my put orders. I thought the down trend was going to stay for a few days. Any way it was a V shape bounce and The day end as a big doji.  I only got some put in the mid and a month end call 1710 outside of all time high.

My main task will be managing risk for the next two weeks since I am close to full load now. I have 6 calls and puts on both side.

T.J. 9-5-13 A Quiet Day

It's a quiet day before a possible storm tomorrow. ES has only 7 point range and it didn't break IB high nor low. It only occurs in 2% of the time according to FT. The market is waiting for tomorrow's job report for August. If the numbers come out bad the market may bounce because a bad job number could delay Fed's tapering QE3. ES is parked in mid ready to go either way. Many anticipate the markets are going to trend down if the number is decent.

I plan to establish put sell positions for the weeks of 13 and 20 tomorrow after the report and market showing a clear direction, not the initial swings. Plus, Friday is a good to get in to take advantage of time decay if the conditions are right for entering. Remember to be patience and control emotions. I exited out my 1680 calls as a risk control measure just in case the market rallies. ES touched Fib 78 and drifted down after open.

T.J. 9-4-13 Bottomed?

It was a trend up day after yesterday's down ward gap fill. It looks like a short term bottom was put in yesterday. I expected ES to test Fib 62% RT as this morning's price action acted like a trending type. I thought there would be a strong reaction by sellers after Fib 62 and gap filled. Therefore my action was selling calls. All of my call selling were filled before lunch. Buyers kept the price up between 1650-1654. It appears that my entries were too conservative. ES may test 50 SMA and Fib 78% tomorrow and stay in mid waiting for Friday's job report. Or it could come back to test BBM and Fib 50% which happen to be lined up. I need to manage my risk of 1680c in case a poor job report drive the market up to close the higher gap.

I missed some bigger picture context today regarding the potential of the up move. I put more weight in Syria risk of drop the market. It appears that I was a little over confidence of the market's short term bearish condition. I loaded call sells almost in full for the next two weeks. I may adjust my bearish positions and obey my rules.  

T.J. 8-30-13 Chaching Friday

It's chaching Friday again. All of my ES options are expired worthless with 100% profit. I sold both calls and puts. I was able to enter positions for each of next two weeks. Since the Syria situation is still hanging I reduced the size to two each just to take advantages of of the decay of the coming Labor Day long weekend. My discipline is improving. I waited until John Kerry come to speak at 1PM. It was some effort to hold my urge to enter a position this am.

My wheat put position finally closed. It took 44 day's for this $400 to decay but it was less than $1000 for margin. Percentage wise, it was a pretty good return.  One more corn contract need to be out next week.

T.J. 9-3-13 Another Week, Another Month

August was a great month for my ES and commodity options sells. I had an average of $762 per week for 4.5 weeks. My win rate was 91%. I am getting better at discipline and executions.

Market gaped up last Sunday night on the news of delaying attacking Syria. Monday was a half day for futures and the market kept a upward posture. This morning's open was an up thrust to the upper down trend line and the last CLVN before the end of the high volume area. It started selling at near of 62% Fib RT and weekly PP. I had a plan of selling options at this Fib level but it was front run by about one point. I didn't execute my SPY put well when I came back from a meeting with June's college adviser after 10am. At that time, ES was pushing down but I didn't think it would be able to breach the o/n low since it already broken o/n high. The odds of break both side is only 25% according to FT's study. I entered a sell order of $25 to exit my $80 cost position. I was supposed to add a put position at Fib 62 RT but I didn't even put an order in. The 162.0 SPY reached $50 high today as ES dropped to the low of 18 points. No plan is the plan to fail.

Microsoft announced that it would buy Nokia's cell phone business pre open and MSFT dropped 9% after open. My in the bag of 33 call is now under water once again. I don't have any clear rules for options at this point. I may have to reduce individual stock options until I have clear winning strategy.

I sold two positions of ES options for this and next week. I am nearing fulls size now. Get to watch and manage my risk now. It looks like attacking Syria is just matter of time since the leaders of Republican Congress are supporting such action. They scheduled to vote no later than next Monday. I need to sell some calls on price pop. My current call position is going to expire on this coming Friday.