Wild Grains 2-27-14

S&P/ES closed firmly on a new high ground. I don't have anything new in this front except my this week's ES puts will expire worthless and give me full profit.

Grains, especially soybeans went wild today. Soybean went up 30 some point after a strong export report this morning. It reached 1745 with no volume profile then it pulled back. I was shocked to see my 1730 got crushed. I didn't add I have risk control ingrained into my brain. I was able to add a 2x position when the rejection was clear. Soybean closed down 14 points from up 30 points. It appears that the tide has turned. I may add a position to my 1730 on a pull back tomorrow.

CL was rejected on a attempt of cross Fib 78 and trend line. It looks like it's been contained for now. My hedge of puts didn't get fill for a tick. It's kind of frustrating. But I may get a better fill since it's moving down over night. CL is facing news break out risk. Russia and Ukraine are in tension over the new pro western government.

Consolidation 2-26-14

A none event day. ES has a similar pattern as yesterday. Dropping, pushing up, like a tug war. It still closed above HVA. It's likely to test a new high again.

Today's CL inventory report had a much lower number than expected. CL pushed back to CHVN and upper trend line. It closed on a pb of $102.5 area. My add on didn't get fill nor did my hedge of put sale after the report settled. I didn't want to gamble by releasing orders before the report.

Soybean continued to make new high and it looks ready to challenge $14. I will add one more to my call sale and hedge it with put sale if we get a pull back. Corn and wheat pull back some. My wheat call sale positions are in good shape for now.  I still didn't get in any corn bear calls. Let's see what tomorrow's export report will bring.

Holding Up 2-25-14

ES held up in IVA. Buyers stepped in before closing. I sold 1750 puts for March 14. No other fill today. It appears that market is going to try for a new high again.

CL broken down overnight and this morning but pushed half way back to below HVA. I had 2 puts didn't get fill since CL didn't not go far enough to fill a old gap. It could be a confirmation if the mid of last three day hold.

Grains are holding up well. Soybean had another up day and took out the high of Sept,2012 at 1385. China keeps buying more of soybeans since Brazil's export got delayed by its infrastructure and weather problems.

S&P New High, Can It Hold? 2-24-14

Market started open drive on Monday morning. ES hit its upper target of 1856.25. But it started falling in the afternoon. It closed at previous break out area of 1845. This looks like a launch pad from CV profile. Or it could be a weak bull's end.  I didn't chase it.

CL tested last August high again today. Although it was pushed down but it still holding on the edge of the HVA. It's kind of odd that CL already at last summer's level. I tried to hedge it from put side but no fill. I am still waiting for a break out or break down as a confirmation to add my calls. Expiration still gets a long way to go.

Grains were supported mainly by soybean. Soybean was up again on strong demand and more rains in Brazil. I added a wheat 680 call sell this month before closing. The trend is on my side and hope it will hold.

OPEX Friday 2-21-14

It's the monthly option expiration Friday. Market usually behaves wildly and swings ups and downs. Today was no exception. But the closing caused a little concern. It closed at the low of the day. Maybe they didn't want to tackle the Jan high on a Friday. Seasonality implies a tendency of pull back. I didn't have any fill until cash closing. Had a March 7, 1735 filled afterwards.

CL finally had a down day of 0.5% providing some relief for my positions. My sale puts didn't get fill. I had to go to June's Start Luncheon. It was a joyful event. Grains are steady except soybean pushed higher before closing.

Held Up 2-20-14

Market often throw a curve ball at us. It's up to us to observe, adapt to changes and act upon it. It looked like a down side action quickly changed after jobless claim report with a better than expected number. It started moving up even when Philly's number was worse than expected. I guess job number does carry heavier weight than regional Fed report. I didn't add anything to ES as I was expecting a pull back at overnight high and yesterday's mid. Apparently there were not much resistances at these levels. I didn't want to be too active since I was concerned my margin level at 70K and in case I had to act upon CL's report. To my surprise that CL inventory report didn't produce a volatile swing. I didn't get either call nor puts. CL is in a squeeze mode of 4h and 1h band. It's at last August's high which produced a big sell off on CL. This time it looks like it want to break out. Today, bulls and bears couldn't get an upper hand. I am ready to act on either directions. Of course I would like to see a break down into LVA. CL is into 6th up weeks already. There is no pull back insight yet. Partially it has to do with seasonality. We are in the up season until fall.

Grains are in consolidation while USDA is having a conference regarding estimate of next year's planting acreage. I tried sell Euro call and put for two days but no fill yet. Euro's options seam to move pretty slow with relatively low volume. I don't why CME claims it's highest traded FX Future options.

Reversal? 2-19-14

Market went down overnight poked yesterday's low before open. I thought it was the pull back I have been waiting for. But it was an open drive out of gate. By 11 am ES already crossed last three day's high touching 1844. My expectation was to see a new high today. During lunch time it started to pull back. My assumption was that market got ready to park in mid for Fed min release. After the usual volatile movements of a major news it appeared the bulls defended the low of 1830 and pushed ES back to 1839. The last hour came to a sell off. I guess that the minute had discussion of rate adjustment causing a major concern. The day turned out to be a bearish engulfing pattern. My early entries based on the assumption of 1830 low defended were all under water. Early evening China's PMI survey was down 7% and pushed ES broke day session's low to 1818ish. The bearish engulfing pattern may bring more selling in near term.

On the other hand CL pushed up to $103.5 territory in the later session as equities were falling. The crude inventory report was scheduled to tomorrow due to Monday as a holiday. I will wait for the dust settled to add put sell as a hedge and possibly add a call sell to average my cost after a high is clearly put in.

Quote of the Day: Adapting to Change is The Greatest Challenge in Trading  By Dr. Bret Steenbarger

Staying UP 2-18-14

Market stayed up in a smaller range after The President Day. I was watching to see if there would be a rejection from the multi-top from last Dec and early Jan. I guess it's too attempting for the market not to take a look what's on the other side of fence. I placed couple orders to sell ES puts but no fill. It has been 10 days without a down day. I get to be patience even though I don't have many positions participating in this up move.

CL had a big surge of $3 today. I add $106 put sell but it's not looking too good when CL pushed up to 103 and into the HVA of 103-109. I later switched to selling puts instead of keep fighting the trend. I need to re-access my 105 position and get ready to take stop after tomorrow's Crude inventory report. I wish I had learned the seasonality trend few days earlier so I might have avoided this error.

Grains had a up day too. Soybean was up 22 C but my add on didn't get filled. I am some what suspicious about the up move of Corn and Wheat. Soybean has strong oversea demand to support it. It's weather news of south America driven now.

Relentless Bulls 2-14-14

Bulls just won't stop. This is the 9th day of green. The 40 points drop of ES seamed a faded memory now. All the gaps created on the way down are closed now. It's likely that S&P/ES will make a new high next week unless the big guys throw another curve ball.

I got really frustrated for the last couple of days when I couldn't get much of fill. I started to look into other market, like 6E and NG. 6E has weekly options which I like, but it has bigger overnight risk. I need observing it more and slowly dip my toes in. At least it's an alternative.

My gain of this week was saved by those CL trades I closed early on. I don't have much in place for next two weeks. I got in 2 bear calls two weeks out which could be in trouble if the market push too far into new highs. It was out of frustration and reacted in counter trend. A safe approach should be raising put sale level instead of heading on with the trend. I better be patience and keep cool head.

Curve Ball 2-13-14

Mr. Market likes to throw a curve ball once in a while. As ES fall over 10 points last night I thought I had a good chance to get in on this pull back.  It opened with a slow push. I was expecting to see some resistance level to hold, such as yesterday's low and fill of yesterday's gap. But buyers were relentlessly crashing all the levels until passed yesterday's high. It was a 23 point range day from a deep loss to a small gain for ES. I sold all of my SPY and ES calls early in the morning with losses. They could have become winners in the afternoon. Of course, hindsight is always 20/20. I only had one fill of 1755 for 2/28 at end of today. I felt that was the highest I want to go for two weeks out.
ES is pushing into the last balanced area created in last Dec and early Jan. It may take some effort to push it through to a new high. I also noticed today that 10 Year Bond was moving higher along with equity market. Is it another curve ball coming? As of this writing at night, ES is falling into yesterday's range. Is this a new pattern of drop at night and up in the day?

CL is holding $100 area so far. We may see it testing $102 area as last night's drop got pushed back. I will wait to see where it breaks out before add any positions.

Grains got boosted by strong export data, especially for the soy complex. I had a bear call of 1430 based on expectations that South American soy bean should come onto market soon to compete with US product. But the push up may not be over yet. it's kind of counter trend trade and I shall manage my risk accordingly.

No Events 2-12-14

No major news release today. ES tried to push into Jan's balance area but was rejected. It looks like it's forming a H/S patent in hourly chart. Let's wait to see how the overnight and tomorrow bring out. So far Asia markets are down. ES is also touched Fib 78% RT line, the last defense of the retrace.

My add on to 1820 call missed it by 2 ticks from $9.50 same as yesterday. It was frustrating. I am learning to let it go. I bought a 1830 call to hedge my 1820 in case of a later afternoon or tomorrow's surge.

I entered a SPY 183.0 call based on Vader's hint it's not working out so far. I also got in an RUT credit spread two and a half weeks out in my personal account. This kind of spread has a high risk amount and need to be more cautious. I will take it out if it doesn't work out. Market is still in its up trend but seams need some big news to push it to a new high. This winter is not cooperating.

CL appears peaked for now. Today's CL inventory report showed more in stock than expected. I got into a $91 bull put to hedge my $105, %106 position. I will add 1 more position on put sell side when it comes down to Fib 38 or 50% daily. CL's daily chart appears formed a top but weekly is still pretty strong. The up trend is still in tack. Apparently this is CL's seasonal up ward which I didn't know about. I need to learn more about commodities' seasonality.

Yellen Effects 2-11-14

Apparently market liked what the new Fed chef, Yellen had to say. Market kept moving up as she moved along with her testimonial in Congress. ES had over 23 point pop and closed forming another bull flag in daily. Obviously I didn't get any bull puts in today. A mistake I made was letting the profit of 1820 slipped away and turn it under water now. Greedy for a extra $20-30 turned into possible of losing $$200 now. The same thing with rule based action and lack of discipline.

CL is still in range and waiting for tomorrow's crude inventory report. I am prepared to act after the volatile move settles.  

Boring but Holding 2-10-14

Market took a breath today. ES had only 8 point range but held at upper side of last Friday. It appears that market was waiting for the new Fed chair Yellen to speak tomorrow. I didn't have any new position since there was no meaningful pull back. My 1815 bear call was exited over night with a small profit. It was a mistake of my part from last Friday. It was too close and I had the urge of gamble. Glad I was able to correct it without a loss. The 1820 bear call still in place and I pushed the exit price a bit too low at 90. I need to get out before Yellen speaks tomorrow. Looks like I may not be able to add more contracts to my 4 for this week. Last week was too volatile.

CL is holding a bull flag around $100 today. I looks like has another leg to go up. I planed to use bull put to hedge my current position. I will try it tomorrow again.

USDA's estimate of export for current marketing year generated some volatility today. My SB bull put was finally out with over 90% profit and one week of time. There was not much juice left. I will try to establish new positions in the grain complex now the report was out.

I also tried couple credit spread in my personal account but no fill. I need to learn more about this strategy. VIX bear calls worked so far.  

Quote of the Day: It's not whether you're right or wrong, but how much money you make when you're right and how much you lose when you're wrong. Soros. 

Job Report & Chaching Friday 2-7-14

Today's NFP report came below expectation (113K vs 155-185K) but much better than Dec's 75K. Market had big swing initially. It kept going up after opening. ES had another 20+ points day after yesterday's pop. It's approaching Fib 61.8% and near testing 50 SMA from below. If these two levels won't hold then it will be back into up trend again. However, the debt ceiling fight is looming again. The deadline is Feb 28. Market may not be worried until 1 week before then.

I had a profitable week despite the two stop out. However, I didn't obey my rule completely to take stop at the first place and take it before add on. Otherwise I would have had more profits. I had to hold back when volatility was high because of these loosing positions. I was concerned if I used too much margins. If I had taken the stop earlier these wouldn't be an issue. Accept losers and I can always recover from small losses. I may not be lucky every time when I delay to take action.

CL had big jump this afternoon. I still don't know the reasons yet. My theses were that CL would stay in the balance range because there were clear rejections in testing both low and high of the area. I entered selling call orders and got blown out. CL reached $100 today. I will have to watch my risks next week. I also need to learn more about this product's characteristics.

The VIX trades worked out well in QII account. I took 95% profit for this month's position which I entered 4 days ago. I can still expect a fair profit in my personal account despite the loss of my first trade and the call hedge. This is a good addition to my ES trade with very low margin requirement when I have ES puts on.

 

Expected, But Early 2-6-14

My primary hypotheses of last night played out today but without the down ward test. LOL. Perhaps the jobless claim report before open encouraged the market. ES opened up and never looked back. It was an over 1% increase for all major indexes. ES is parked right below last break down level of 1768. It's in a neutral position and ready for tomorrow's job report.

I am glad it worked out this way. I managed to exit my two endangered positions with slightly better results due to the up trending type of price action. Despite of the two stop losses this week is expected to be a profitable one. I will manage any down side risk tomorrow and try to get in some positions if we get a bad job report. I won't trade with the first hour of the report release.

I also tried grain and crude oil today but no any fill. My VIX trades are going well so far except my  1st try of the $17 call sell position. This is a trade-able product but requires patience. I have to wait for volatility spikes to trade.

Compressing 2-5-14

Market has been consolidation for the last two days. It didn't get out last two days' range. ES tried to break lower but only had 2-3 ticks. It couldn't go above 1752 either. It appears waiting for tomorrow's jobless claim and Friday's big job report. It has a pasture of testing below 1733.

I have no new positions and exited two of 1730. ES didn't come to fill my 1740 exit which I have get out tomorrow. I am planing to exit my 1715, 10 and 05 position to reduce my risk just in case Friday's report causing a big drop.  I need to reduce micro managing my positions. Sometimes if could cost me $200 more when I try to save $20 in my exit. Just do it when it comes to the my level.

After compression it's expansion. We just don't know which way it will go. I will wait for the job report before getting in any new positions for indexes.

Taking a Breath 2-4-14

Market took a break after a big sell off as expected. I was an inside day and ES couldn't hold above PP of 1750. A sell off at closing pointed to a possible down day tomorrow. ADP private job report before open may give a clue for the current job market condition but people question the credibility of ADP's numbers.

My hypotheses 1 is that market would push lower in the next day or two then, pull back to a neutral position of 1750ish before Friday's job report. Hypotheses 2 is that market would stay low as the expectation of a bad job number.  The key is how do I act base on my hypotheses and market condition. I missed opportunities to exit my 1740 and 1730. I have tendency of trying to save few bucks but missing the bigger opportunity and bending my rules. I am still not a rule obeying, well discipline professional. I will exit these positions tomorrow base on my rule of stopping at 1.5-2X losses.    

True Bloody Bath 2-3-14

All major indexes fall over 2% without any major news today. It was more of a methodical but accelerated selling. I guess most people didn't expect it would go this far. ES dropped 46 point which I don't even remember when did it happen last time. Anyway, it was a true blood bath day. I am glad I didn't carried away. I was watching my available funds and picking my entries. Although I entered some positions too early because I didn't expect ES would drop over 20 points. I only realized things were getting serious when my S3 level was broken. I still have some funds left in case the sell off continues.

What I didn't do well was that I didn't plan my stops first. My guideline is to take stops first then enter further OTM positions to recover from the loss. If I don't take stop first and let the losses going further my recover will be harder and take longer time. I need to harden this part of my discipline.

I sold couple VIX call options today as I am learning it. This instrument has large percentage movement and bigger spread. It has bigger volume comparing with most commodities.  

Bottomed for Now? 1-31-14

The market is getting volatile. As I woke up this morning ES was down 23 points. European and Japen reported lower inflation which caused concern of slow growth. I think the US GDP of 3.2% saved the day. We tested new low of  1761 before open and pushed all way back to the range of yesterday and last week. Then it was the later afternoon selling again. It was the same pattern for most of the week. ES parked at yesterday's low. However ES looks like had a strong rejection at 1761. It appears that was a good bottom test for now if there is no several bad news come out over the weekend.

I had two fills at 1705 and 1715 for next week. I didn't extend myself too far out until the outside risks are cleared. Let's see if we can hold the low next week.