Up But Not Enough 1/30-14

ES had a nice up day with a 15 point range. However, it was basically an inside day if viewed it with overnight profile. The critical level of 1795 to 1800 above still act like a cover stone. The daily formation still looks like a bear flag unless we move up and hold tomorrow. The closing sell off wiped out more than half of today's gain. We may see the market recheck yesterday's range and hope the low will hold.

I didn't have any fill today. It was up most of the day and I didn't want take any position on the sell off before closing. I would rather watch what happens tomorrow. If we go down I will have better opportunities. If we go up then my 1740 and 1730 positions would be much safer. Plus, overnight risk is still on.

Surprise of No Surprises 1-29-14

My primary hypotheses of market movement on this FOMC day was wrong. I thought the market was going to squeeze out most buyers at the bottom and then force the seller to cover before 2PM announcement. Apparently the emerging market currency crisis has more pressure on US market than I expected. ES could not stay in yesterday's range for the most of today.

My exit plan based on the above hypotheses didn't work out so well. Market fall out overnight when I was near break even before I went to bed last night. I plan was to exit my last 2 positions 1 - 1.5X loss before 2pm announcement. But ES never came back to the mid level of 1785 to get ready for FED. I ended up taking 2x stops right before and during the announcement as my timed orders are getting expired. Overall, the losses are within my rules of 1.5-2X of my entry. That's a big improvement comparing with my handling of last Sept's loss. I am now gladly to take stops. I just need a more strict rules and decisive actions. I can recover from a 1.5-2X loss in about two weeks.

I followed my rules of not trading during the 1ST hour of FOMC. I only had 1 fill of 1650 two weeks out. It's not likely although possible that ES falls another 110 point in two weeks. But the downside appears not over yet from a TA stand point. Fib 50% RT from last Oct low is at 1740. I have to deal with my two positions at this level next. Plus the emerging market currency risk is on. Expect a volatile market in the near future. I may need to shift my attention to commodity now.

Quote of the day:  “Luckily, markets give us a chance to go to our corner, regroup, and get ready for the next opportunity.”  (Derek Hernquist)

Currency Problems? 1-28-14

It was an inside day for ES in a hope of Tuesday turn around. Although it opened higher but it couldn't take out the high of prier day. I was able to exit part of my positions of 1770 and 1765 of this month end. These positions were was passed my stopping point last Friday. I didn't have time to deal with it last Friday as I was busy trying to exit the two under water scalps. I got out within 1.5X of my entries. I had a thought in back of my mind as should I just exit all of my contracts. I didn't have a clear rule in my plan. I often use scales in attempts of reducing my losses. The risk of this practice is that the loss could get worse. I need to set some rules here.

After closing market had a big pop on news of Turkish Central Bank announced a 0.75 point rate hike to defend its currency. ES had a 12 point pop and it made my feel that I was out too early. Then I came to think of such unforeseen event could go either way. I did it right following my rules in a rule based trading.
I made progress in my discipline by being able to hold my urge to enter positions in a day before FOMC meeting. I had fear of missing if the market pops after the meeting. On the other hand it could have a big drop as well since the market is in a short term down trend and some good news may not help. Either way, get to hold my rules.

No Relief, Yet! 1-27-14

It was another down day but not as server as last Thursday and Friday. The market is under pressure from some emerging markets' currency devaluation (Argentina and Turkey so far). Plus the normal action of clear the deck before Fed Meeting. The action may last until Wednesday noon time. We may see further down ward move after Apple's disappointing earning and guidance. It dropped $40 in after hour trading.

I didn't get much risk off of my 1770 and 1765 positions except one of my 1770 exited at $8.5 by accident premarket. The same bad habit of keep changing my targets with every market move. My habit and subconscious instincts seam often overcome my rational thoughts and plan. It has taken much longer than I expected. But I need keep working on it. Perseverance will pay off eventually. Like how bamboo growth.

I am setting up some stops for overnight and I won't be able to change them during my sleep. Hopefully Asian and European markets will create some movement.  

Bloodshed

It was an even bigger sell off day than yesterday. It's like a small black Friday as a thought crossed my mind when I was writing my daily report last night. But I didn't expect it would go down 38+ points including overnight. ES lost 63 points, 3.4% in last two days. It's an usual out-liar.

I had a very busy day dealing with my two "scalps" turning in to losses. I was hesitated to take small losses for my 1800 and 1795. Although I managed to reduce my loss to $400 I wasn't act decisively around noon time when I realized the market couldn't pick itself up. It was only less than $200 in red. Luckily I didn't hold and hope like I used to be. ES closed at 1780 and it would have been a disaster if I didn't scale out in the early afternoon.

The real cost of losing may come next week as I had positions entered way before the drop occurred. VIX upped 30% today and I went into it in next two levels up. They are all under water now. I may have to take next week's 1765,1760 stops as they are only one day's range away. They seemed so far out only two days ago. Get to accept that I run into unusual market conditions which happens several times a year. Just make sure not let the loss get to big. I can easily recover from a modest loss.

Keep Calm and Carry On.  

Explosion 1-23-14

As expected a compression usually leads to expansion or explosion. We got an explosion today but was not to the up side. It started with China's PMI flash report below expectation last night. ES had a 23.5 point range down day but recovered about 10 points before closing. It was a wild day. My ES entries were between 15-18 point range. Fortunately market bounced back later afternoon, otherwise I didn't have much margin left to add more positions. I entered a tomorrow's scalp and a regular size for next week. I will try to add some further OFM contracts tomorrow if the market stabilizes. It looks like another BBD/M PB set up but it's a counter-trend like last week's.

My CL positions are all closed now. A lessons learned. I feel more confident about trading CL now.
Grains are still in a range bound.

It has been a lot of talks about market correction recently. Will it happen this time. We have had multiple tops but couldn't crack it. Earnings are mixed so far. May be some heavy weights' report will give the market energy next week.

Compression 1-22-14

After yesterday's V shape bounce, ES took a breath to consolidate. Both side were not motivated to move it out of a small range of the upper VP. It ended up with a 6.75 point range, a neutral inside day. Someone said it was a fourth smallest range since 2009. A compression usually lead to explosion one way or another.

On commodity front, CL had a 1%+ day, marching crossed Fib 50RT and 50 SMA. Fib 61.8% is right at 97.20 level. I exited my 82 put with over 90% of profit squeezed out. I have only the $90 put left open. Grains had a on hold pattern. Soybean looks like a bear flag. It may not be done with selling yet.

V Shape Day

Market was up near last Friday's high overnight on Asia's up market. ES opened ready to challenge 1846.75 of last Dec 31's all time high. With a few ticks of overnight high it got sold off. It cut through overnight low, last Friday's closing (gap filled) and that day's low. I was not prepared to see all the levels failed and placed SIM trades in those levels, then got stopped out. I also sold a 1800 put to scalp for this week. It ended up about 50% too early. I thought it might be another 20 points down day and I was prepared to fill up my positions for the next two weeks. It didn't not go that far and buyers stepped in after lunch. The day ended with a V shaped motion. I guess the big guys just want to clear deck before take it to next levels. They don't like too many people join their party.

Grains had a quiet day except Soybean complex. The reported rain from Argentina sunk 36 points of Soybean. It is back into CHVA now. I tried to sell puts for this and next month. Only this month of 1200 filled for about 8% away. Is the three day rule going to apply? More than likely. I may be early again. Next time on the big moves I should wait for the dust settled to enter orders. I still have some day trading mentality with my swing set ups. Remember that monthly options are different than weeklies.  

Chaching Friday 1-17-14

It was a choppy and volatile day as expected. But dealing with it is something else. I didn't wait until the last hour to release my orders as I thought to do. Of course it could go up in the last hr. Over all, it was a fair day. I didn't have a big emotional ups and downs. I was doing some book keeping as ES was pushing down. I only adjusted my S5 order back to my original entry. I entered two more cars for Feb 7 at 1740 in fear of my 1730 won't get filled in early afternoon.

I am fairly positioned for the next two weeks in my ES contracts after today's entries. I have one more set to add for each week when and if the market pull back further after the long weekend. Some think the market is getting little tired. I will follow my risk management rules regardless anyway.

There were not much activities in the commodity front. My plan is to reevaluate my LO 90 position after the long weekend with some more decays.

I decided to trade credit spread with my two smaller account. RUT has much bigger spread. It's kind of hard to get filled. I only had IWM spread filled in my IRA acct today. VIX stayed low today. I will observe about VIX's behalves as I am waiting for my position to decay.

"Nature gave us one tongue and two ears so we could hear twice as much as we speak." - Epictetus

Resting at top 1-16-14

Market chopped at top today. With mixed earning news it appears that pros are evaluating the current economical condition and direction. It's in consolidation mode in TA's view. We could go to challenge the high or form a double top here. Tomorrow is triple witch options expiration Friday. There could be some volatile chops base on past experience.  

Grains and CL are in consolidation as well. No trade was filled in this front. I tried to enter RUT and IWM credit spreads but no fill either. I am at a little better than break even with my CL $90 now. My order is in place to exit half with a bite more decay or push up in price. CL may move up to test Fib 38% RT at 94.85-95 area which is a CLVN too.

Confirmed 1-15-14

ES set a new high of 2014 at 1843.75 today. My BBD/M pb setup didn't work this time. The trend is stronger. ES left another gap behind without any pb for me to make a sell entry for ES. It appears market is ready to make another push up during the earning season. NQ made another new high too.

CL had a near 2% up day. I finally got a break on my $90 position. I will exit one car before this weekend to reduce my risk. I forgot LO's last trading day was on each Wednesday instead of usual Friday. This error caused me to exit this week's position and left $50 on the table. Oh, well, learn to forgive my own mistake as it's part of the business. I exited my Feb Soybean put with 99% profit. There is no point to hang on to it while tight my margin. Over all it's a good and calm day.

Reversal 1-14-2014

The reversal pattern of last Nov and Dec appears repeating itself and quick than previous ones. Market took back most of Monday's ground. I used my BBD/M break and pull back set up entered 2 SPY puts for this week and next week. It looks like my level didn't hold. I will exit this week's position on a pull back tomorrow. I entered my first VIX call sell options as experiment in my personal account. It's volatile with low margin requirement and higher return rate if works out.

CL crossed Monday's low and showed some momentum. I have been patiently waiting for tomorrow's CL and NG inventory report before I get in a position again. I may be saved if yesterday's low hold after the report. If not I will have take the stop of March $90 put.

Quote of the Day: Carl Richards, “Investment success is not a matter of more information, intelligence or skill. It’s a matter of behavior.” 

Is It Coming?

Is the much talked correction of last several month finally coming? ES opened up for the first two hours. I thought the week was starting to challenge last Dec 31's high. It started to sell off at noon. It ended up with a 20 points down day. I had a hitch of 20 points when it was at 12 points. But my 1775 of Jan 24 put sell got filled already. ES is at low of current balance area. We will see in the next couple days if the balance low would hold like last Nov and Dec. Patent tends to repeat itself. ES touched Fib 38% RT today. The next area is Fib 50 and 62% RT (1799-1788) with 50 SMA in between. Be ready to take stops and get into further OTM levels of low 1700.

CL retested last week's low and seamed holding it so far. There are conflicting forces affecting crude oil prices. A deal with Iran may lift the sanction and increase oil supply and a conflict in Iraq may affect the supply of oil. I will have to take stop if the price go down and breach the last low. I will enter further OTM to recover the loss.

Grains held last Friday's level except Soybean which jumped 20 points to retest last Friday's high. It's either double top or break out. My this month's SB put position is paying off.

Now, risk control and management are my priority. Luckily I had a dermatologist's appointment this afternoon. It might have prevented me to enter more orders prematurely. We may see more selling days to come.

Here They Are 1-10-14

The employment number of last Dec came out in a big surprise to the down side. There were only 74K jobs added v.s. 170K expected. With such a disappointment I thought the market might sell off but it didn't. It explored the low of Thursday then was bought up. ES puts premiums were fairly low so was the VIX. Market closed slightly positive on Friday. Market may need time to digest the numbers and Fed's next move over the weekend.

On the commodity front, USDA's Grain Production Report provided volatile moves. The most noticeable was corn. It popped over 10 points from a new low. Soybean went up but pulled back to pre-report level at closing. Wheat lost some ground again. CL tried to push higher but was not able to close above prior day's high. It's basically a inside day. We are not out of woods yet. The weekend will give me some time decays but be prepared for another push down attempt. My this month's puts sell is in a better shape. The main concern is the $90 put for next month.

Quote of the Day:

 Charles Kirk, “Making mistakes is part of the game and we all make our fair share. If you can honestly forgive yourself right now, you will take the first step toward having your best year ever.”  (Kirk Report)

Clear Deck 1-9-14

ES expanded off last two days' range both top and bottom. It appeared to clean the deck for tomorrow's report. I was able to sell to open couple of positions in IB & S5 for next two weeks. I must stay out off ES trade for at least two hours after the Job report. Anything could happen after the news and it will be up and down several times before a direction is clear.

CL had another leg down today. It broke last Nov's low of 92 and got pushed back to close at yesterday's low. Today's candle is like a shooting star and 4 hr, 1 hr are forming a IHS. Unless it close above yesterday's high tomorrow, we are not out of woods yet. It's often the pattern to circle back to retest the low. The weekly chart is still bearish. The down trend is not done yet. My March 90's stop was near but not reached. I added 1 of 89 for next week and 83 for March to off set possible of March 90 stop. Most times my pushed trades out of boredom caused my headache. This is one of them. Remember: When in doubt stay out. 

I am out of Corn position with a small profit and over 40 days of holding. Corn broke to a new low today. Glad I am out. Accepting that some trades won't work out. I didn't have the same luck with my soybean 1220. But the price is close enough for me to get out before the USDA's grain inventory and production report at 11am.

Chopping 1-8-14

It was a chopping day as expected. ES stayed in the range of yesterday. Fed Minute releases only provided bigger chopping. The prices were up and down in a 6 point range. Put premiums continued to stay low. There was not enough fear of further drop.

CL dropped another 1.6% after inventory report. It was an orderly drop. I set several defending level and entries but none got filled. It's challenging $92 at the last break out level in weekly chart.  My $90 put position will be in big trouble if we lose 92. I forgot to buy USO puts to hedge my position as I thought about it couple days ago. I didn't implement it as I was hoping the Fib 82 could hold. A typical of "hold and hope, but no action". I may have to take the hit of stop out if the wave three is actualized. I will buy a put position to hedge it on a small pull back tomorrow.

Grain complex had a cross board sell off today. According to Arlan, big funds started their portfolio re-balancing and positioning for Friday's World Production Report. I will get out my ZS 1220 put tomorrow. ZC hit a new low of $4.15 today.

The Waiting Game Again 1-7-14

Market's mood changed to somewhat positive overnight. ES opened in upper part of yesterday's range and took out the last two days' range. But it didn't go too far with a 9 point range. People are waiting for tomorrow's Fed Minute and Friday's job report.

I have another day of no fill of ES sell. My SPY weekly calls and RUT spread is working. I closed a half of SPY for a 50% return in one day. I am looking at possibly VIX options selling in my smaller acct. It has a very low margin requirement but volatile instrument. RUT may work but it's hard to get fill since the spread is wide.

New Year, New Trend? 1-2-2014

The first trading day of 2014 started with gap down. ES went down from Globex open with a 20 point range. Is it a correction long waited or just a clean deck before resuming the up trend? We should be able to tell in the next few days. VIX didn't react strong for today's sell off. I didn't get any fill for my ES orders.

Grains and CL had a major down day too. Both corn and wheat tested multi-year lows and soybean had over 30 point, over 2% drop on South American weather and better production news. I made a mistake on soybean entry last week viewing January contract instead of March. My Feb 1220 put sell is over 60% under water now. I entered another position at 1180 to prepare for stop out of the 1220 position. I thought CL had a trend change last week after two weeks' up move. It got sold off at Fib 78 weekly level. I should have seen it last Monday. Now my $90 Feb put sell has reach stop point. It was over $3, 2% drop today. I will add one more position between Fib 62-78 level to manage my risk. But don't be stubborn, the drop may not be over yet. I realized to step aside today during the heat of battle on ES and soybean. That is a progress of learning. But I underestimated CL's move. All the option chart levels were blown out of water. CL is now back into last balance and high volume area. $94-93 may provide some support. It may form a IHS on weekly bars if these area hold.

Be patience tomorrow. Weekend decay is not the main reason to enter a position.

Trying to Hold 1-6-2014

Today is first day of the first full week of trading. The big money guys are supposedly back from holiday vacation. Market tried to push up at open but failed to close in last week's range. My S levels has not hit yet. There are still not enough fear on this third down day. VXX stays at 41.5 to 43.6 range. Despite of the 15 points move today I didn't get any fill for my ES orders. Volatility is fairly low. Market is waiting for this Friday's job report. The uptrend is still intact but we may get a mild correction.  

CL punched through my S1 level and held on the cliff. There was no strong rejection but hanging on the cliff for now. The down trend continues. I didn't get any add on or exit today. If this level holds we may see a bounce, It has been 5 down days and over 7% retrace. Of course it may go down to break the 92 level.

No add on to grain positions either. I will try to exit Soybean 1220 before this Friday's report. My 1180 position is still far OTM.

I had SPY call near the money with Vader. May have to take stop tomorrow. I started to trade RUT spread now. It seams harder to get filled. Will continue to trade SPY, IWM spread.

No Telling Yet, 1-3-2014

It was a inside day for ES. Equities attempted to push high in the afternoon but only got pushed down at closing. Some said because a lot of major players were not back in business yet. Next week may tell us the real mood of the market.

It was a profitable week for me. All of my puts sales expired worthless. My CL position is not that lucky though. CL had another 1.5% drop after yesterday's near 3% drop. It's site at 78% RT from Dec low and 62% RT from 2013 low. I had 1 file for my Feb 90 put. It looks like it may be down further. I added one more car near the high of price. I still moved my entry a little. I have to take a stop if CL closes below key Fib levels next week. It was not a well thought and planned trade to begin with. Picking out March contract was not my rule of engagement.

I will need to work on my trading plan this weekend. I have define my rules further with each type of contracts.