We are now up almost 100 points off the low from last Friday. Happened a lot quicker than I thought it could or would. Regardless of the bullish price action, I have to step in here and put a short on the table.
We have hit the prior support of the triangle pattern that broke down on 11/17. Not a bad play in terms of risk here. I expect a move back below 1230 ES. This is an aggressive trade because there is no confirming signal yet of a reversal... To enter this trade you have to be willing to take heat. I am willing.
We may consolidate up here for a bit before turning back down, but I do expect some profits to be taken off the table sooner rather than later...
Subscribe to:
Post Comments (Atom)
Expect to see consolidation type trading tonight and tomorrow. Perhaps we see a consolidation range of 1239-1249. I will consider selling the high part of that range and buying the low part of that range to build up some profits that can be used toward a stop loss on my 1245.25 Short on the ES...
ReplyDeletei always follow your comments. I have missed your comments sometime, but now it looks like you are posting every day. Thank you for your great work and suggestion and naturally your trade. until five ninutes from now i hade a short order at 1246.25 but the es goes till 1245.50. Maybe i will entry later.
ReplyDeleteThank you for your work
Ric
Do you still hold your short? How do you resist not to close the position when the market is going from 1239 to 1244? If you still hold it, what give you the fore not to close the position?
ReplyDeletetia
Ric
Thank you Ric, glad to see you are still reading.
ReplyDeleteSo far the consolidation trade I mentioned in the previous comment is working like a charm. Any moves back up to 1247-1249 are shorts for me, the high at 1251 today may very well be the inflection point for the move that will take the ES to 1220-1223 tomorrow or the beginning of next week.
Very tricky times these days and that is not going to change, looking forward to see how the global financial markets unfold into 2012.
Re: holding my short.
ReplyDeleteIts all about doing your homework Ric, I am very confident in the levels up here. Even if we trade higher, my analysis tells me resistance will hold. At the same time, I already anticipated that today would be a consolidation day and that is exactly what is happening. I hold the short in my swing account and day trade the range (both long and short) in my day trading account...
With every trade, you should have a profit and exit strategy. If you know what to expect and know when to exit, then market action should not affect your emotions in terms of wondering when to exit.
The shorter the time frame that you trade, the more emotional it gets. The greater the leverage you use, the more emotional it gets.
For me, I like to maintain at least $10,000 per contract that I trade on the ES. This gives me some comfort and allows me take heat on trades without being scared into covering a position. It is still trading with leverage, but not too much to handle.
And in terms of my 1245.25 short. Its all about profit target. The risk has to be worth the reward and the reward has to warrant the risk.
Trade target on my short is 1222-1223 or a minimum of 27 points. ES may trade lower than that, but I will take profits there. In terms of my exit strategy, it is up to each individual to determine his or her own risk tolerance.
ReplyDeletethank you verde for your explication. I m short now at 1246,25 and i m not so comfortable with it right now. WE will see...
ReplyDeleteric
i have closed the position at 1245.75. It is so erratic and i have to manage my fear.
ReplyDeleteIf i may, what are your profit target to that trade?
I see now i made a mistake; but if a profitable trade turn into a loss it makes me very angry and nervous. I have to learn a lot..
Ric
Ric
If a sell-off is going to happen today, it often won't be initiated until the final hour of the day session. You get a lot of noise in the middle of the day which supports your erratic interpretation of the price action...
ReplyDeleteLike I said in my first comment, I think we remain in a consolidation range today. Buying the lows of that range and selling the highs has been very profitable so far.
until tomorrow verde.. I m very tired and im going to sleep (i live in europe and i waked up at 00.15 o'clock new york time)
ReplyDeleteric
Still holding short. Will elaborate more on this position later and explain why I did not cover the position after the ES broke yesterday's high overnight...
ReplyDeleteCovered ES short at ES 1257 for 11.75 point loss
ReplyDeleteWill consider putting this short back on the table at a retest of the pre-market highs. No follow-through strength yet following great unemployment numbers reported this morning
ReplyDeletehello verde..the volume was low yesterday and today, until now, too. iwould like to short too, but the sp500 gained more then 100 points in 3 days...
ReplyDeleteRic
here in europe the indices have rallied all the morning but now they are still positive but are going down even if the sp500 gained 7 points from the low of the day.
ReplyDeleteMaybe to short at around 1263 is to much for today
My short on Thursday offered solid odds of a reversal opportunity because there was significant resistance in the 1245-1250 range. You can see this was the case as the ES consolidated off that level for a bit. In hind-sight, it would have been smart to cover the short when the ES made new highs overnight, but I tend not to trade the GLOBEX session. I let it ride and eventually had to cover the short in order to avoid taking on excessive risk.
ReplyDeleteTrading the consolidation range like I spoke about, provided insurance against the failed short attempt. This is one way to hedge against an open position.