FOMC Again 4-30-14

It's FOMC day again. Market held up and no big swings because the outcome was expected. There was no surprises. I followed my rules to wait until the dust settled. I had only a 1920C bear call 2 weeks out. No bull puts filled.

Grains continued their upward move but at smaller pace. I tried several bull puts but no fills. I didn't chase and would like to wait for a pull back to get in. All of my positions are outside of ranges for now. I will be patient for new opportunities coming to me. Tomorrow is the usual export report and there may be opportunities present.

In the energy front, CL dropped below $100 overnight and continued the down ward slid after open. I had add on to my $96 and filled a new 495 bull puts after cash closing. I will wait to see when and where the slid would stop. It's near daily Fib 78% RT now. NG started a pull back and moving in my favor. The uptrend is still intact. The time decay will help me out if NG doesn't have any big surprise.

Hurry Up and Wait 4-29-14

Indexes kept up trends but but hesitated to break out. They are waiting for tomorrow's Fed FOMC announcement. I didn't have any fill in ES. I shouldn't have placed bear calls considering the up coming FED meeting. Glad it didn't get filled. I must stay with my rules tomorrow: No entries within 30 minutes of the announcement, wait for both directions fully auctioned and the direction is clear.

I had a CL bull put of 96 filled when CL popped over $1.5 and pulled back. It turned out to be more than a pb. It's testing yesterday's low after market. I will deal with it if it break down after tomorrow's CL inventory report.

Grains continued to moving up. I am into June's expiration now. Remember that grains trend a lot longer and stronger than equities. Wheat is in poorer condition according to the field tour report. It may go up a lot more. I need to hold off on bear calls.

Monday Trending? 4-28-14

It was a wild day. ES broke both Friday and overnight high and low. It opened higher and started selling off at noon. Was it Ukraine related? We didn't know at that time. I didn't over react to the big push down. I was entering bull puts 1 or 2 at the time taking measured steps. However I made a mistake by buying 1760, 5/9 instead of selling it. I didn't follow my procedure of order entry. It indicated that I wasn't calm enough in the heat of market movement. I did well in two entries of S5.

Grains held up well. Exports appeared slow down. Planting progress and weather conditions are in focus now. I will stay with seasonality and trend. No fill today and I am not in a hurry. It's a new options month.

I studied NG over the weekend and decided to add it to my trading arsenals. It has good volume and reasonable margin. It can be volatile with higher premiums. I had my first order in to get a feel of it.  

Chaching Friday 4-25-14

Ukraine tension stopped the up push today. ES tested BB/M daily and bounced so far. I had to go get the new car and missed some entries in ES and grains. I got couple of ES filled before closing for the next 2 weeks.

This is my best week so far in terms of realized gains. It's total of $11.5K minus $3900 rollover recover. It's net of $7.6k. Of course one can't expect every month like it. Part of it was luck of under water recovery. A lesson learned that the combination of weekly and monthly options improved my total return.

No Follow Through 4-24-14

The big overnight gaps of ES and NQ were filled shortly after open with news from Ukraine. I thought the sell off could go lower and the day was still early so I didn't rush to get my bull puts in. Until there was a strong rejection at CHVN of 1863.5 I started my orders. I wasn't sure if there would be another wave of selling beyond the 15 point range. It ended up in a choppy afternoon. I had no fill today. I felt OK and move on to another opportunity.

Corn and wheat were up on Ukraine and weather news too. I had a bear call at 780 filled in wheat for May. With worsening crop condition, the up trend of wheat may not be over yet. I will try to get in bull puts on pull backs. Soybean is under pressure with expectation of more Chinese buyers default and more import beans on the way.

CL is still holding its bear flag. I am waiting for further drop to build my bull puts.

Building a Base? 4-23-14

Equities were in range today during RTH. ES had only 6 point range. Both ES and NQ are above their CHVN and filling in a LVA. Apple reported earnings after hour and pushed ES and NQ up to cross today's high. Let's see if the push up will continue or get fade by big money. I un-winded couple of my ES positions for this weeks expiration.

Grains are also in range bound. Corn went up despite USDA reported lower ethanol production and higher inventory. Soybean took another step down.  No fills in any grains today.  

Dipping In 4-22-14

I am back on my trading desk today. It was a four day weekend for me. Market closed on Friday and I visited UNC w/ June on Monday. Equities were up and grains were down big time on Monday. Most of my May bear calls exit targets were hit on Monday. I forgot to check and adjust my exit prices before the trip and left a little extra money on the table. A lesson need to remember.

ES is in upward move. Grains are still affected by Ukraine news, weather report and export data. I only had a bull put on SB 1350 today. There were no fills on corn and wheat.

CL had a turn around Tuesday today down 2% near $101.6. I missed my bull put of 95 by a tick of 26. It appears the down turn is not over yet. I may have another chance after inventory report tomorrow.

Chaching Thursday 4-17-14

Weekly options expired today due to due to tomorrow's market closing for Good Friday. It was a $3K winning week but I made some poor entries from early on. I let my guard down and influenced by Dirk's aggressive bull puts. I am saved by the last 3 day's bounce luckily. But how many times can one be saved by luck? The only reliable way to trade professionally is strictly following rules and stay disciplined.

All of my credit spread are closed with profit. VIX bear call worked out too. I made a mistake by closing IWM 1110 instead of 1120 this morning. I didn't realize I was intense, controlled by emotions. Then I moved my 1120 exit price up to get out too early. Although it didn't cost a lot but was bad execution.

Grains holding up with some signs of weakness. Despite strong export data soybean and corn went down but recovered some at closing. Wheat closed below $7 for 2nd day. I will exit out my 680 position next week.    

Upside Back? 4-16-14

Turn around Tuesday continued today. It moved up to the next LVA as my main hypotheses of last night' post. I was able to unwind my bad trades of 1835, 1830 from last week. These positions were down over $1k at a time and I didn't take stops. I was going to roll them over again which I realized it shouldn't be my first choice. Roll over actually tight up more capital and time where I could make more round trip of returns.

I may take some longer time trade for bigger premiums providing it has equivalent or better than my weekly average of 1% in ES and much larger distance of strike.

Wheat and corn came down to lower part of yesterday's profile. Soybean was up 17 points again and firmly above $15 mark. I didn't have any trade in the grains today. I am waiting for more time decay for my current positions and waiting for soybean to get to a major level before short it.

Tomorrow is the last trading day before the Good Friday. I will manage my bull spread in IWM with couple near money positions. RUT, SPY and VIX bull puts are winners in the bag now.

V Shape Bounce 4-15-14

ES crossed Monday's high after European market open. US market opened with a out of gate drive up crossed HVA above. On the 2nd hour it started falling on Ukraine valence news which I didn't know at that time. ES pushed to 2 ticks before yesterday's low of 1809, then buyers stepped in. From there it started a V shape bounce until it made a new daily high before closing. It was very technical and well calculated move, of course in the hindsight. I tend to believe a short term bottom is in baring from any geopolitical event. ES is sitting slightly above Fib 61.8% RT from the top down. It may be range bound in the LVA of 1828 to 1860 for the next couple of days since this is a short week. Markets will be closed on Good Friday. Most of my ES positions look safe for this week. I will try to exit out some NTM ones tomorrow to reduce risk.

In the grain front wheat and soybean had a strong up day. Wheat is up 25 points on Ukraine's tension and poor crop condition rating. Some wheat grow area had snow over the last two days. I missed the opportunity to exit my last holding of 680 for wheat. I thought I was safe when it came down to 660 and I became greedy. I kept lowering my exit prices. Now May wheat is at $7 and I am 20 handles under water. I may add one on another leg up and prepare to roll over. I entered a bear call of 730 trying to have a scalp but was too early.    

Taking A Breath 4-14-14

With Citi's better than expected earnings market popped pre open. From the TA's point it was at end of the HVA and low of B band. ES and NQ traded inside of last Friday's range but couldn't break out. In the early afternoon it started to push down and closed last Friday's gap and pushed back. It looks like a decent rejection at bottom. If the market can hold the low tomorrow and push back to last Thursday's range the we may be safe. Otherwise a new low is still possible. I will exit my near the money positions on any pop to reduce risk.

Wheat and corn opened higher last night on Ukraine tension and export data. Wheat is near 680 again. I will monitor it tomorrow and may raise my exit target for risk control.

Quote of the Day

IT'S NOT THE WILL TO WIN, BUT THE WILL TO PREPARE TO WIN THAT MAKES THE DIFFERENCE.

Paul Bryant.

April Week 2 Review

It was a bloodshed week for the market. All of my aggressive and rule bending entries were exposed to losses. There was a pull back to Fib 50% Rt on Fed Min release Wednesday. I planed to exit some positions to reduce risk the next day. It was a much bigger sell off before my hope of further up was gone. I had to roll out my 1850, 1840 and 1830 in S5 on Friday. Obviously this week's trading result was a disaster. I ended it with -$2.6K and uncertainty of these roll over would work. I think taking stop at 1.5-2X of my cost is still a better way to deal with loss than roll over at 3-10X losses.

Grains have paid off nicely so far and would show up in next week's results. I have to watch out wheat 680 and corn 510 since both are near the money with Monday's pop on Ukraine tension and strong export report. Weather may be a factor in the next few days. Some of the grain region are having snow in the mid of April.

I need to spend more time on preparation of my trades, mainly identify levels of S&R, having a plan for each day. I will install Ever Note to keep track of my plan, thought process and emotions.      

More Selling 4-11-14

Market sentiment has changed so quickly. The sell off continued today. ES hit it's Fib 23.7% target and closed below it. Next is 50% at 1799. The up trend daily chart 61.8% RT is at 1789. It's less than 5% pull back so far. How far it will go 8, 10 or 15%? It was another bloodshed today. I had to roll over 1850, 1840 in IB and 1830 in S-5. It's a net loss of $2.6K not counting roll over for this week. Luckily I scratched 1820, 1810 with a small profit. It looks like there are more roll over for my 1835, 1830 for next week. I shall stay out of equity indices for the next couple weeks except adjusting positions.

Grains continued to slide today. But I don't have any fill for either in nor out. Wheat and corn premiums have not changed much. Does it tell me something? I need to get out my near money positions early next week. Don't be greedy. Things can change pretty quick.

Bloody Thursday 4-10-14

I stated there would be some kind of selling action at the Fib 50-61.8 yesterday. My expectation was a mild push to retest yesterday's break out area or the low of the day. I started to enter bull puts when prices came to these area this morning and noon. But the selling continued a wave after a wave. It accelerated after 2pm and was well controlled. It ended to a near 40 points, 2% drop. ES closed at 1826. I don't even remember when it happened last time. My 1850, 40, 30 puts are all under water now. I am preparing to roll out these positions and exit others with B/E or partial profits to reduce risk tomorrow just in case another follow through on Friday. It appears the correction just started and we have more down side to go. Fib 23 target and 200 SMA are at 1817-12 area. Volatility is picking up. I had a Vol 19 call filled at 25.

Grains lowered today. SB is forming a HS on right shoulder. Wheat broke the low of current balance area. Corn was down but pushed back to mid at closing. CL held its up posture well.

Tomorrow is going to be a busy Friday with roll over and risk off trade. Be prepared and disciplined.

A Follow Through 4-9-14

ES had a choppy start this AM with 7 point range. It started to push out yesterday's range after lunch. FED minute release gave it a boost to 20 point range. It closed between Fib 50-61.8 RT form this sell off. I expect there would be an attempt of selling at these levels in next 2 days. I would get out my 1850 - 1820 positions before the week end. It may be choppy for a little and building the right shoulder if the top is really in.

USDA report didn't give grain complex a lot bullish figures. Wheat was down 15 point at one time after the report. I was able to exit my 1705 and 1710 with over 80% profit. Corn and SB are both closed lower than before the report. I had only a SB bull put got filled.

CL continues moving high. I may consider to sell calls when CL reaches $103-104 after tomorrow's inventory report.

The Third Day Bounce 4-8-14

It's often said that the third day bounce is the rule of thumb. We had a small bounce today after a reject of new low. The bigger question is if this is the 8-10% correction people have being talking for a long time. With the earning season begins market may be cautious in both directions but volatility may increase with good or bad key earnings. My primary tasks are to access and control risk, unwind my risky positions. I will be more defensive and trade less ES.

In the CL front, boy, I am so glad I exited out the bear call yesterday. CL popped up to 102.4 I would have been upside down more than 100%. A good lessen of following rules and correcting mistake quickly.

Grains are still range bounded. Wheat's option premiums just won't barge much. I had to moved my 710 bear call to 4.5 from 3 to close a half of my position. My 705 was not closed when CME halted grains trading 40 minutes before closing due to some kind of technical problem. The WASDE Report is tomorrow noon not today as I wrote yesterday. It will be some volatile reactions as highly anticipated. I will try to exit my wheat and corn bear calls and wait for dust settled before entering any new positions. I also need to check seasonal trend.

2nd Down Day 4-7-14

I didn't have a clear hypotheses to begin with today. The problem started showing on my lack of preparing Levels and trades each day. I attend FT's Trader Bite each morning and pretty much take his views of the market. This is not enough. I have to develop my own market analysis and plan.

I entered two puts orders this morning at 1810 and 1780 for this and next week respectively. It was during the first 2 hr of RTH. When I saw ES started to push back into yesterday's low range. I thought about waiting for a confirmation of testing overnight high or at least for the hourly bar to close. Then the fear of missing took over. Then market fall off and made another 20 point down day. I had doubts when I was placing the orders but as usual I ignored them. By the time the real selling came I didn't have much margin ($3.9K) left to take advantages of the high volatility. I must remember "when in doubt, don't trade". I still need more patience.

Wheat was up 8 points overnight. It came down to retest IHS neck line after open. My exit orders didn't get fill. The premiums didn't give up much. I was able to close 1 of 680 before closing at $12 1/4 which was my order price of last week but far from my order price of $7-8 this week. All grain prices didn't move much in anticipating this afternoon's Crop Progress Report and tomorrow morning's WSDE Report. I am glad I am out one to reduce my exposure. Once I am out $7.05 and 7.10 I will be in a much better shape. My $5.10 corn call is also a bit of concern when current price is at $4.99. I may add one after tomorrow's report.

CL had a pull back today and still trading in current LVA. I was able to exit my $103.5 call with $100 profit and correct my error of that aggressive trade which I noted in my weekly review. When it's a wrong trade with a profit it's still a wrong trade and need to be quickly corrected.

 

Quote of the Day

Brett Steenbarger, “One can be passionate about trading and yet completely neglect running a trading business, just as one can be passionate about cooking and baking and fail to run a successful restaurant. “  (TraderFeed)

Very true. I need to focus on the business aspects of trading: developing rules of engagement, planning and executing my plan. Know the risks and keep them under control. 

Letting Guard Down - April Week One Review

During the first week of April, I run into two options expiration dates on the month end and weekly. It was a profitable week with over $2100 profit and no losers.

I spent a lot of my time monitoring grain market. I followed my rules of engagement most of time with commodities. I was patient for the most of the week. But I let my guard down when I saw Dirk Friedrich  ‏@veenmr1 posted his CL and ES counter trend options trade. I took higher prices than his but they were not my rules of engagement and risk tolerance. I often thought his entries were too aggressive and didn't follow his trades. However, he has been winning some this type of trades with high premiums despite his recent major draw downs. I guess I was envy his higher profits per trade. I will have to stick to my rules and risk appetites.

Last Friday's 30 points flush created a bearish sentiment and bear engulfing pattern. I will wait to see what market reveals next week while stay on my plan of risk control and patience.  

From Chopping to Dropping 4-4-14

It wasn't a bad job report this morning. 192K new jobs in March was a little below expectations. Market reacted positively earlier. ES touched a new high of 1892. When it got pushed back into yesterday's range I thought it was going to be a choppy day. I started to get some ES orders ready for the next two weeks. When it breached yesterday's low I started concerned. I was measuring a 18-20 point day. My early entries were under water. Even a far out order of 5.75 got hit. I reminded myself to step aside not to do more until near closing. But I didn't follow my thought. I kept looking at the charts and thinking about how many orders I could enter with my available margin. I entered 2 more orders ES orders in the afternoon. The bigger mistake was earlier today. When I was entering ES orders in AM I thought about it's still too early to tell the type of the day. Then the fear of missing took over. Especially when there appeared a strong rejection on yesterday's low. I thought I may not get anything if that was it. I sold total of 10 orders of 12 contracts in both IB and S5 account. The last one was filled after cash closing. Good thing I didn't right was reduced size of each order. But it's still clearly over trading. My price selections were too aggressive influenced by Veenmr1's entries on Twitter. I pointed out this error yesterday but didn't even think twice today. I broke my rule of entry in 2 STD.

I sold some VIX calls at 20 and 19. They both are in 90% probability of OTM. They have only a little over 1 week left. I should be OK if there is no major crash next week. Russell is the weakest one in indexes. I need to take my 112 put spread out next week to reduce risk. I thought about it yesterday but didn't do it. Now it's slightly under water but the trend is not in my favor.

Grains came down some but didn't hit my exit orders. I will take some wheat positions out early next week with further time decay. The risk is a pop up if USDA's condition report come out bad on Monday. There were some rains gave wheat drought condition release but not enough according to Arlan.

CL stayed in $101 range, LVA. It looks like it may claim up to HVA of 101.5 - 102.3 area. Will monitor my risk here.

Choppy Day 4-3-14

Almost every market was choppy today except Euro had ECB announcement. Euro dropped $1. I caught a put sale under a weekly key level of 135 off 137 for 2 weeks. CL bounced within a LVA. I made a close call sale of 133.5 influenced by Verner1 when I twittered 133. Although my entry was above recent highs but it was not based on my rules and my type of risk parameter. This trade should be classified as a none disciplined trade. I will try to get out soon if I can break even or get a little profit.

Grains pretty much held their current pattern with a little up skew. I may hold my wheat exit over the weekend for further decay if there is no major move tomorrow. But there is a risk of reversal next week. I should get 680 and 705 out first.

ES touched a new high again and bounced back on a early afternoon sell off. One of my call sell order was exited but my 1905 is still in danger. It appears the market is expecting a positive job report tomorrow morning. I will wait to get in any indices position after the trend is clear.

Relief of Grains

Grain complex dropped lower overnight. Wheat had 12 points move before open which was unusual. My first exit order was filled overnight at 16 5/8. I made a mistake which I forgot to lower my order target before go to bed. Wheat continued down another 10 points in RTH. It's closed at low of BB daily but before Fib 50% RT for its entire up move. It may get a bounce tomorrow if USDA export report is bullish. I should be able to reduce my call positions further with time decay and they are all OTM.

ES finally broke 1880.25 and made a new high of 1886. It looks like a new balance area is developing. I sold 2 calls too early. The same thing happened I thought about wait but still placed orders. Now all my calls are underwater. I need to unwind them.

CL had a bullish inventory report with -1.2 million B inventory but price didn't respond much to the news. This year's seasonality may be pressured by US's own increasing production of crude oil. Something need to be recognized and trade accordingly.

Goals for April with Weekly Reviews

As FT stated that trading is a business. A successful business needs to set goals, milestones and rules of running the business. These are the areas I need to work on. From now on I will set goals of my trading targets, steps for improvements, developing and perfecting my strategies and rules. I will review my goals on a weekly and monthly bases.

My goals of April are:

1. Continue to learn grains and crude oil futures movement and selling options of these products with a systematic approach and patience. My observation is that commodities tend to trending a lot stronger than indexes. They can move in one direction for days and weeks influenced by seasonality, events and related news.

2. Watch for risk and recognize my emotions. My emotions tend to get high when my positions are underwater. I naturally fight a trend when I am wrong. I should instead trade from opposite direction to follow the trend and reduce or mitigate risk.

3. Continue to learn option spread and covered calls. My goal is to be able to trade spread and covered calls in my other account and generate consistent income.

April Fool 4-1-14

Indices continued to move up. ES challenged its March 7 high of  1880.25. It broke it after hour. I sold two calls of 1905 and 1920 for week 2 and 3. It appears that 1905 of week 2 is too close. It would be in a no men's land if ES establish a new balanced area. I will have to manage my risk and possibly leg up.

CL had a 2% down day. I sold a 95 for two week out. Luckily I didn't follow Vennier1 to enter $98 put as CL closed at $99.70 and is in a LVA of $101-98.65. I will wait to sell a call after tomorrow's CL inventory report.

Grains followed yesterday's trend. Corn and soybean moved up and wheat came down to prior balance area. It looks like a HS pattern is forming in daily chart. But weather and crop conditions could push price back up. I am try to be patience letting time decay help me scale out my near money positions.

The End of Month & Quarter 3-31-14

Indexes broke up higher from Sunday night open. It kept a upward posture all day although not a decisive, large range. I have three positions expired with 100% profit for the month end. My size of ES trades are smaller since I am trading more of grains and crud oil. With commodities my margin requirement is lower thus getting higher % returns. But most of them are monthly so I treat it as a longer term positions.

USDA's Planting Intention report came out at noon and all grains went wild as expected. When the dust settled soybean and corn are bullish and wheat are slightly bearish due to the acreages and ending inventory. During the shotgun event my exit target for corn got filled but none of wheat reached. I will continued to manage my exit for wheat to reduce risk and size of my calls.

March ended as my best month in terms of total profit ($7.6K) thanks to these monthly commodities puts. All weeks are profitable despite roll over some corn options. The first quarter has been my best quarter too. I had only one losing week in the last week of Jan for about $150. I didn't know how to use options roll over to void a loss at that time. So true about " we only know what we know". I am making good progress toward a consistent and disciplined professional. Risk control first started ingrained into my trading process. My patience is also helped by diversifying into different markets. Keep up the good work and keep things in perspective.