Market
Overview:
The US Dollar index itself is at a very interesting cross roads here. As pointed out in this week's WCTS Blog, we are either at the end of a bearish Bat harmonic pattern (which would imply lower levels from here) or we push up through the 2012 summer peaks (suggesting much higher levels to come). Regardless, the area between 83 to 84 is a very important one and I for one will be keeping a close on how it resolves. While the bond market has yet to be convinced the North American economy has indeed turned, equities are enjoying what appears to be a flight back-into-risk. The fact that all world indices tracked are now pointing higher suggests we are closer to the end of this run then the beginning. Considering seasonality, I wouldn't be surprised if the spring/summer of 2013 marks an important peak. Interestingly, the rally itself is coming from unexpected sectors as our ABG trade (AAPL, Bonds & Gold) takes a break. Indeed, out-performance from sectors like pharmaceuticals shouldn't come as too big a surprise given CRI's 1st 2wks of Q1'13 study suggested that would be the case. Have the metals been beaten up a little too much? Recent WDB Options Model screen results would suggest so as several 'get paid to take a position' trades have emerged of late.
Weekly highlight:
While energy stocks continue to move higher with the broader stock market, Crude oil itself is having a hard time getting going in earnest. We did put in a very tight double bottom (with an associated 'buy' level on the 4 hour charts at 91.60) two weeks ago. This past week confirmed that bottom by moving higher. That bottom was rather 'V' shaped on the daily charts which suggests we ought to at least trade down into that area once again to see if prices really do want to reject moving lower. As for upside objectives, both the daily 50% level and a rather noticeable gap areas are looking to be traded to. Bullish enthusiasm should be tempered at present (as the weekly chart above points out) as price continues its two year consolidation. At some point this market is going to break out and it will be violent. I don't know if it can do so this year before the typical seasonally bullish time of year for commodity prices in general ends. Having said that, May is still two months away and anything can happen before then.
The US Dollar index itself is at a very interesting cross roads here. As pointed out in this week's WCTS Blog, we are either at the end of a bearish Bat harmonic pattern (which would imply lower levels from here) or we push up through the 2012 summer peaks (suggesting much higher levels to come). Regardless, the area between 83 to 84 is a very important one and I for one will be keeping a close on how it resolves. While the bond market has yet to be convinced the North American economy has indeed turned, equities are enjoying what appears to be a flight back-into-risk. The fact that all world indices tracked are now pointing higher suggests we are closer to the end of this run then the beginning. Considering seasonality, I wouldn't be surprised if the spring/summer of 2013 marks an important peak. Interestingly, the rally itself is coming from unexpected sectors as our ABG trade (AAPL, Bonds & Gold) takes a break. Indeed, out-performance from sectors like pharmaceuticals shouldn't come as too big a surprise given CRI's 1st 2wks of Q1'13 study suggested that would be the case. Have the metals been beaten up a little too much? Recent WDB Options Model screen results would suggest so as several 'get paid to take a position' trades have emerged of late.
Weekly highlight:
While energy stocks continue to move higher with the broader stock market, Crude oil itself is having a hard time getting going in earnest. We did put in a very tight double bottom (with an associated 'buy' level on the 4 hour charts at 91.60) two weeks ago. This past week confirmed that bottom by moving higher. That bottom was rather 'V' shaped on the daily charts which suggests we ought to at least trade down into that area once again to see if prices really do want to reject moving lower. As for upside objectives, both the daily 50% level and a rather noticeable gap areas are looking to be traded to. Bullish enthusiasm should be tempered at present (as the weekly chart above points out) as price continues its two year consolidation. At some point this market is going to break out and it will be violent. I don't know if it can do so this year before the typical seasonally bullish time of year for commodity prices in general ends. Having said that, May is still two months away and anything can happen before then.
Trading
Strategy
(1 week):
BoT (Break out Trades) I am very comfortable working with my 15m charts and playing double bottoms & tops for moves to either 50% levels or OTE sweet spots. Ideally BoT entries come at or near hourly OTE ss levels. The key with BoT's of late seems to be to only enter a position on a touch of the 13ema following the double top/bottom. Most trades take less than 10 ticks of heat and easily move +30 ticks in the trend's favor. So with this in mind, my trading strategy is to concentrate on BoT entries at or near hourly/4hr OTE levels. If this initial trade entry does not work and I still have confidence in the 15 minute price pattern, I will take my 2nd attempt at the trade at the OTE ss (level with stops 4 ticks below previous significant low). The end reult of this second attempt will mark the end of my trading day regardless. I will finish the day either +$140 (+30 stop hit), +$250 (AOCO +41 hit) or $-310 (personal loss limit hit). I want to focus on 5:30AM to 8:30AM trading window and take every setup that occurs during this window of time.
BoT (Break out Trades) I am very comfortable working with my 15m charts and playing double bottoms & tops for moves to either 50% levels or OTE sweet spots. Ideally BoT entries come at or near hourly OTE ss levels. The key with BoT's of late seems to be to only enter a position on a touch of the 13ema following the double top/bottom. Most trades take less than 10 ticks of heat and easily move +30 ticks in the trend's favor. So with this in mind, my trading strategy is to concentrate on BoT entries at or near hourly/4hr OTE levels. If this initial trade entry does not work and I still have confidence in the 15 minute price pattern, I will take my 2nd attempt at the trade at the OTE ss (level with stops 4 ticks below previous significant low). The end reult of this second attempt will mark the end of my trading day regardless. I will finish the day either +$140 (+30 stop hit), +$250 (AOCO +41 hit) or $-310 (personal loss limit hit). I want to focus on 5:30AM to 8:30AM trading window and take every setup that occurs during this window of time.
Mental
State
Review:
While I believe I am ready to take the next step my trading of the past week does not confirm this. I need to be more focused on executing in the setup zones and not making excuses to not perform.
While I believe I am ready to take the next step my trading of the past week does not confirm this. I need to be more focused on executing in the setup zones and not making excuses to not perform.
Trading Plan:
For some reason I checked out this past. I got stopped out on Monday at my personal loss limit ($-310) made the money back on Tuesday ($+325) and then did literally nothing for the next three days. Finally, late on Friday (more out of frustration then anything else) I took a questionable setup and got stopped out for a $155 loss. So I chewed up three days of my combine for a net $-155 on the week. While not a disaster, I could have done a lot better...
For some reason I checked out this past. I got stopped out on Monday at my personal loss limit ($-310) made the money back on Tuesday ($+325) and then did literally nothing for the next three days. Finally, late on Friday (more out of frustration then anything else) I took a questionable setup and got stopped out for a $155 loss. So I chewed up three days of my combine for a net $-155 on the week. While not a disaster, I could have done a lot better...
Once again here are my goals for the coming week:
1.
At 5:30 be at my post with daily sheet setup done and levels
predetermined 2. Only consider trade to 60m price target with 1st attempt (15m BoT) & 2nd attempt (15 OTE) OR No Alignment = no trading. 3. Take 2 trades each day = 10 trades in total for the week. 4. No Sim or practice account trading. 5, Hold every single trade to either -15 or +41 AOCO level / 60m target.
That's all for this post,
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca
http://crisdaytrading.blogspot.ca/
No comments:
Post a Comment