T.J. 10-31-13 Follow Through

Day 2 of FOMC, market continues to move lower but with a lot of push back. It broke both o/n low and high. The low didn't reach my support of 1749-1748 and the high got to my 1st R line of 1762ish.

I entered two scalps for today and tomorrow. The last one I did wishy washy a lot between 55-70. A bad habit kept showing up. I prepared to trade ES options in my personal IB acct  but no fill today.

Tomorrow's support levels are 1745 and 1738ish. R levels are 1763, 1767 and 1770. I will try to have positions for the next two weeks.

T.J. 10-30-13 FOMC

My plan of exit 1760 calls didn't work as it was faulty to begin with. I thought about to exit it at 1.5 to 2X loss yesterday and entering it at $11.50-12.50 it would have recovered better in math. There was no pull back at all  last night but touched a new high of 1773. ES opened testing o/n low and looked ready to go back up for a new high. I exited my 11.50 at 12.25 with fear of a new high. I had to exit my 3.25 position at 2X loss at 9.25 but it was when it fall back. After FOMC statement market struggled up and down to 1751 It finally went back to PP of 1760 and Fib 50 RT in today's range. I had one scalp for this week and one leg in for next week at 1705. It is only 50 point, 2.8% away from my entry and bit too close.  I will be ready to exit out and get in further OTM if it doesn't hold. The up trend is still intact so far and Fed is not going to taper for now.

Tomorrow may be a follow though down day. It's down this evening and could be a gap in the AM depending how the European market react to Fed's news. My down side levels are 1740, p-days low/Fib 23.6% RT and 1735, last balance area low and CLVN. The upper side levels are 1762 of PP and 1768 of a trend line and the last CHVN, 1770 would be a double top which may be a heavy resistance.

T.J. 10-29-13 Raging Bull

I don't even remember when was the last down day since the debt ceiling deal. I have not been able to sell any puts this week. Bulls are pushing up all major indexes without any meaningful pull back. I have no any put position since I close my 1630 put for this week yesterday.

I was expecting the market to take a breath today since tomorrow is FOMC. Over night actions stayed in the upper section of yesterday. ES had a similar pattern as prior days of pushing down at open and popping to new highs at closing. I waited all day trying to add a position to my 1760c at 11ish. I was patience enough until it got filled after hour. But I realized my approach was faulted. I should have taken the stop first and enter another position at the price I wanted instead of letting the old one been taken to a bigger hole. As ES is getting to 1768 at S2 filling my add on, I am deeper in the water with my older one.

Tomorrow is going to be wild after 2pm FOMC's statement. I would expect 20-30 point swings. I must exit all of my position before 1pm regardless of loss or win. Also identify couple areas up and down for new positions. If we get a taper statement I may want to wait for the following day to get a clear picture.

T.J. 10-28-13 Monday Agian

It's Monday and possibly trend setting day. ES set new high of 1762.5 overnight and fall back with European market. Sellers pushed it down after open and buyers stepped in at lower trend line + O/N low. The pattern continues from last week. It's a strong up trend market, however, last night's high was contained by a top trend line from September's high. I guess it will take Wednesday's fed meeting to break it or drop from there.

I don't plan to enter any major positions for ES options before FOMC this Wednesday. I will manage my 1760 call to unwind it before end of tomorrow. Will not hold and hope. It's going to be a big move and I have learned from last FOMC's price action.

At closing, it looks like ES is not ready to challenge the upper trend line yet, it started to pull back after reaching 1760 in the last 20 minutes. It may still want to hold outside last Friday's range and claim a new high day. It closed at upper side of VP and BB/H but inside of VA. It may move up again overnight and tomorrow.

T.J. 10-25-13 Chaching Friday

ES touched a new high again for barely 1 point before closing. Buyers picked up every pull back this week.
Today's move may give next week another leg up.
I didn't have a lot for this week in my ES options since there were no any meaningful pull back. I am learning just taking what market will give me not force any trade. I am glad to take $800 this week without taking much of risk. I don't have much position for next week.  

T-J 10-24-13 Flaging

ES had the same pattern as yesterday: dropping at 1st hour and buyers stepped in pushing it up till closing. It has been building a higher high and higher low in daily and hourly charts after Tuesday's pull back of touch Fib 23 target. On a bigger picture it's forming a bull flag. It looks like ready for another leg up if it breaks 1755 high again. BB4 is in a squeeze channel. On the other hand, MACD is going lower hinting a possibility of no break of new high. We will see more clear tomorrow.

The keys for tomorrow are, Low of 1743, 1739 and 1735, high of 1755, 1758 and 1765.

I had one put sale scalp today. Nothing else. I spent more of the afternoon at Dentist office for a deep cleaning. That is no fun.

T.J. 10-23-13 A Pull Back

This is the first pull back day since the debt ceiling deal. Is ES forming a bull flag or a HS? Giving the strong up trend it is more likely that ES will try to challenge the high or make a new high. Only time will tell.

I got in a scalp of 1700 P today for $110 income. there are couple others didn't get fill. I am also trying to get out my 1760 C for Nov 1 just in case the market going for a new high. It has been choppy all afternoon. I had more stop out in my ES Sim trading. The low end of my estimated range 1735 was hit this morning.  

Grains had overnight high but sold off at closing. My wheat position is still out there, but getting close to get out if there are couple more down days.

T.J. 10-22-13 Jobs

September job report came out close to what market was hoping for, slow growth. Market shoot up with below expectation job number. ES reached a new high of 1754.4 which is Fib 23% target from August low. After a 12 point push down to yesterday's high buyers stepped in and held the trend. Tomorrow's range is between 1728, 1739 to 1763. The market is like an raging bull now. There has been no any sign of slowing down since last week's debt ceiling deal.

I tried 2 scalp from below but no fill today. My 1760 call of 11-1 is under water now. I may add a contract at 2X premium and one further OTM above 1780. I will get puts in if we get a pull back of 1-3 days before this week end. Wheat is the strongest hold up among grains. My 2 call sell positions are ok but hasn't appreciated as I had hoped. I should see more of accelerated time decay for these November calls. I entered them bit too early.

T.J. 10-21-13 Waiting

It's a very slow Monday. ES is hanging in last Friday's range after a early test of new high of 1742.5. It had a 7.5 point range. It looks like the market is waiting for tomorrow's job report because of the government shutdown delay. Tomorrow's range may be 1728 (gap close), then 1722 S2 to 1748 RL and 1752 TL depending on how the market interpret the job data.

I didn't have any new position today. Waiting for a upper or down level and volatility to return. Be patience.

T.J. 10-18-13 Wrong Plan Leads to Bad Result

My plan for today was only one sided. It was based on my expectation of the market behaves. I didn't have a hard rule of exit in place other than 2X stop loss. Earlier I had only less than $300 under water. I could have a plan of scale out at lower loss. Instead, I had to close most of the call sale positions in the last 30 min. It was dangerous. I could have cost a lot more than $380 if the market kept going up. At one time it was over $1100 under water.

Good thing is that I didn't panic today. The overall plan was executed although the plan itself had flaws. Also in planning entries I need to have some more hard rules instead of gut feelings. Also be flexible. In a trending day, selling puts is safer than calls for scalping. In reviewing my results, most of my big losses were from selling calls.

T.J. 10-16-13 S&P's New High

The after debt ceiling deal party didn't start immediately after open. As many thought it might be a sale on the news day. With the slow motion I thought it might get knocked down after a test of new high. But the bulls were persistent and kept pushing up until the end to the new high of 1728. It even got to 1733 this evening with China's GDP news.

I tried to scalp by selling calls this morning. I didn't expect it will get close to 1730 when it was at 1715. I got sucked into the same situation as last Friday. The same habit of not thinking from the other side. I guess it takes more than once to change a habit. It would be safer had I kept selling puts since it was a up trend day. My 1735 call selling is under water now. The upper resistance is at 1740. I will be forced to take stop if we gap up tomorrow and keep going. But the monthly option expiration may help me unwinding this position. Either way, must follow my plan and rules.

T.J. 10-15-13 Near Ending

It looks like Congress is closing on a temporary solution for re open the government and raise the debt ceiling. It may be voted tonight or tomorrow before the deadline. ES has been up 20 points since open.

I was looking at some call selling positions if market pop further on news of a deal passed. But it has not happened. ES reached its Fib target of 23%, 1716 before closing again and made a double bottom. We will see what happens tomorrow if the market sells on the news after it bought on rumor.

T.J. 10-15-13 Market on Defense

It's all about Washington now. Any good or bad news or rumor today made the market nerves and jumpy. These politicians are playing fire. I am so tired of both side now.

Had 2 put positions sold for this week and end of the month today. I forgot to release one and was in panicking mold when I saw the price already crossed my target. Without looking at the overall condition I raised 10C to $2.85 and clicked the T button. It ended touching high of $3.60. Other than that, I was patiently waiting and voiding to get too many orders in just in case Congress drag into the last minute or even the unimaginable default really happens. We will see tomorrow if these guys like to be magicians.  

T.J. 10-14-13 Still No Deal

There is still no deal in Congress for the government shutdown and debt ceiling. Market opened on Sunday night gap down with ES had 15 points gap. It got recovered with today's news about a possible deal nearing. I didn't have any orders fill since the price didn't come up or down to my levels.

I started a weekly option trading room with DTI for this week. I want to lean spread options.

T.J. 10-11-13 Chaching Friday,

I like Fridays now because it's a pay day from market. Although I get paid on the day of selling options but market can take it back until Friday's expiration time.

ES opened up again as expected. I had a chance to close my 1695 pre market but it wasn't my plan. Any way, it was a busy morning and noon to unwind all my call selling positions. I had to average up 1695 and sold them gradually. In the end I only made over $120 for all of the 11 call positions. It was too risky for these scalps. Of course I am glad I didn't lose any money. One change in me was that I didn't wait and hope for the mercy of the market. My goal was exit safely and I achieved it. Market started to push up after 2pm at algo time. The 1695 would have been assigned if I didn't get out earlier.  

My goal was achieved this week without a loser.

T.J 10-10-13 Think Differently

Wow, what a day and night from yesterday to today. Yesterday market reached a new low and formed a doji or hammer bar. Overnight the hint of a possible budget and debt ceiling deal moved everything higher. ES opened today with a 18 point gap. It pushed up and never looked back. My expectation for ES was it would trade around 1677-1681 of CHVA but more likely fill in 1665-1670 of the CLVA while waiting for the final deal if any. Without any confirmed deal ES kept pressing ahead and made 38 point advancement including the gap. It's the 2nd best day of 2013 after Jan, 3rd.

Things I did right today:
1. Remembered risk control first. I didn't take 1685 or 1690 calls although it was about 30 points away from this morning's view. I didn't enter any call sale position for the next two weeks since I expected more upside to come with a deal from DC.
2. I didn't over react to this big push, rather I was slowly adding my tomorrow's expiring position.
3. I was relatively calm.

Things I didn't do well.
1. I under estimated the potential of this move. I didn't re-draw Fib retrace which could tell me 1683 was Fib 50 RT.
2. My bias led me to enter 1695 and 1670 scalp too early.
3. I didn't think differently from the opposite direction. I could have sold puts below the gap to scalp and get the same result with more safety.
4. I still feel the fear of missing when I decide an entry order which cause me to lower my entry level. Instead I need to wait for the price come to me.

At this writing of 11pm, ES pushed cross 1 point of RTH high at 1688. Fib 62 RT is at 1693.5 and a weekly R/L at 1695. We may blow off these level with any positive news tomorrow. I need to manage my risk of 1695 and 1700. I may add one more to 1695 at $350 and close the position on any weakness tomorrow.

T.J. 10-9-13 Bouncing

ES tested Fib 78 RT and lower trend line this morning and bounced. It ended up with a Doji of daily bar. This could be a change of mood and a bottom signal with a successful retest of low. Of course DC is still a big factor. Any news could pop or drop the market.

I had a 1590 put scalp today. Tried couple call scalps at 1685 and 1695 but no fills. I am all in put but looks safe for this week's pay off now. May get in more for the next two weeks by Friday. Altering prices are still a problem for me. Get to watch levels in big pictures.

Tomorrow's levels: Up is 1667 to 1671 with 1669 being 50 SMA. Below is 1639 being D bottom and 1632 at last major support.

T.J. 10-8-13 Cracked

Market's bottom finally cracked this morning. Yesterday's closing below 50SMA was an indication. It was slowly and methodically pushing down all day. I thought the Fib 62 RT of 1660 or 23 Extension at 1653 from top could provide some supports. They were cut through like butter. It was finally held at the lower daily down trend line. It doesn't look like the capitulation has happened yet. Tomorrow, the down side could be Fib 78 RT at 1640ish and Fib ET 50% from top at 1637ish. On the up side, it may push to 1665 or 1669 at lower end of last CHVA.

By and large I executed my plan well with some small flaws. I had one entry for each week only varied prices and levels slightly. My expectation was a 15-17 point move but it actually was 21 point. The entry of 1605 for this week was too early at $155. It reached $220 later in the day. I added one at $210.

An announcement of Yellen will be the next Fed Chef this evening made ES rallying from 1646 to 1657. Let's see what may bring tomorrow. Be prepared for both ways. I should only scalp for this week and watch my risk, especially the 1615 position. Ready to take stop and ladder up for a new position if a big drop follow through.    

T.J. 10-7-13 Trend Setting Monday

With concern of debt ceiling and fed shutdown, equity market gaped down on Sunday night. It dropped further after European market open. I thought that we were going to see ES moving to the next balance area of 1663-1642. Instead it tested over night low and bounced and pushed up for most of the day. Until about 20 minute before closing market started to dropping. ES pushed all the way back to the LOD by cash closing. I got today's sequences totally wrong in my SIM trading. It appears market is setting up to crack the bottom tomorrow of course it's a news driven market.

I started to leg in for the next two weeks. I have 120 and 160 points away for 10-18 and 10-25. The volatility is high and October is famous for big drops. Be ready to add, or take stop and re-enter farther out positions.

T.J. 10-4-13 Friday

It's a harvesting Friday. All of this week's puts and calls are expired with profits and reached my $1K target. The market opened with initial selling and got pushed up until closing. It looks like the debt ceiling can be raised based on the House Speaker's statement.

I used too much margin for scalping yesterday and didn't leave enough room for my regular positions at later time. I need to improve this area. A new allocation plan may be: 6-10 for coming week in 2-3 positions. and 4-6 for the week after = 2 weeks out. Of course it's all depending on market condition. Position size for Fed week should be reduced or get in early and far OTM.

Remember: Risk control first. Wait for the price come to my setup = I own the market.

T.J. 10-3-13 1st Flash Down

ES looked ready to push up in the morning after overnight's double bottom and rejection. It was above CHVN and it opened higher. It quickly turned negative. I tried to go long at O/N low and clvn but both got stopped out in sim. It went down to 1663.5 and filled a old gap. It was a 21 points swing. I was way too early to put in my put scalping order thinking the double bottom and last swing low could hold. Today's pattern was just opposite of the last few days. My 1650 put of $65 was crashed big time up to $305 despite I added one more at $125. I wasn't totally prepared at all. Luckily the options are fairly forgiving especially near expiration. My positions were recovered mostly by the day's end.

My head wasn't very cool before noon, partially I had to deal with the Deloach's problem. I didn't have a good sleep last night. Some pro traders have a rule of not trading if they are upset or didn't have a good sleep. Get to pay attention and recognize my own emotions and state of mind.  

T.J. 10-2-13 Holding?

The market has been holding well in the balanced area. This week's pattern has been drop overnight and push back in day session. Considering the fed shut down on the 2nd day it's holding pretty well. I haven't heard any resolution for the budget gridlock. I guess that is what the market is waiting for. The market will eventually go either way. My job is to minimize risk and maximize profit. Be mindful about October since several big crashes has happened in this month.

I had a chance to take profit in SPY for half of my position. I moved my target from 125 to 135 and missed it. This bad habit seams becoming a second nature now. Get to recognize it and change it.

I have been distracted by Deloach Group's debt issue. The guy is pretty sneaky. He used my name and accounts to engage health insurance contract and product purchasing.  

T.J. 10-1-13 Fed Shut Down

The Federal Government officially shut down today. All of non essential federal employees are temporarily out of work. Surprisingly the market kept pushing up to fill two gaps above. Closed at high of the day. ES is at 1689, near BBD/M. I expect a drop tomorrow based on BB PB and Fib entrancement if there is no major news of a budget deal. Hypotheses 2 would be pushing up to Fib RT 50 at 1697 or Fib 62 at 1703.5 which are end of CHVA and CLVA near S3.

I didn't get in any ES position since it didn't come down or go up far enough. I had a SPY put position for next week. I will be patiently waiting for the price come to my area of interest.