Wednesday, December 03, 2008

Technical Picture - Crawling Back

A weak open following a dismal ADP report and lower guidance from tech titan RIMM. But once all of the data and bad news was out of the way at 10:00, price moved above the retracement zone and rallied to retest yesterday's highs and eventually extended sharply higher. Prices swooned heading into the FED beige book at 2:00. Once that bad news was out of the way, they rallied back to session highs.

Two consecutive up days following Mondays drubbing. Can we get 3 in a row? Tomorrow's retail sales are sure to be really bad. Will the markets shrug it off like they did today? Friday's jobs data will likely be even worse. If the markets manage to digest all the bad news and close the week relatively unscathed, it will be a positive sign for the bulls.


Today's futures trades - I missed the front end of the day, but managed a couple of trades in the second half. Futures drifting lower in after hours.

8 comments:

anarco said...

I really like how you played this one Jamie! And I also wanted to thank you again for the "3 consecutive higher closes" info you gave me yesterday. It was a great pointer!
A question about your e-mini trade: what was the rationale for closing your first short position? (I am also wondering if the 3 consecutive higher closes that take place 7 or 8 bars before your exit was one of the factors.)
Thanks in advance!

Jamie said...

Thanks Anarco,

This is a 3 min. chart, but on the 1 minute we had 3 consecutive higher closes move into the blue line segment which indicated the bearish trend was about to reverse.

Also this was a 62% retracement of the preceding thrust, so it fits the ambush model that I describe in the RIMM post below.

James said...

Hey Jamie,

When you scan for stocks, do you look for ones following the overall broad market, or do you just go strictly off the individual stock charts and neglect the overall market in your decision to scan and enter a stock?

- J

Susan said...

Hey Jamie,

Bothering you again. Do you know of any swing trade blog which is updated frequently and the strategies clearly explained, like your's. Reasons for entering and exiting the trade clearly explained. This is not for me, but for my husband. I prefer to remain all cash at the end of the day to have a good night sleep.

Thanks,
Susan

Jamie said...

James,

Normally, I try to follow the market trend. But on days like today when the market was range bound for most of the session, I took the setups long and short as they presented themselves. I had a very short list for B&B setups going into the session from last night's chart review. I took X long and eventually took CNQ short when it broke it's trendline.

Under less volatile market conditions I like to scan for gappers in pre-market especially earnings gaps, but lately, I've been mainly focused on my usual suspects and futures.

Jamie said...

Hey Susan,

No bother. I like The Market Speculator. Also, Weekly Technical Commentary has some paid services as well as Trading for A Living. Downtowntrader is free but the page takes a long time to load. All of these are listed in my side panel in the blog lists.

I would be cautious about swing trading in the current market environment. I was expecting a strong bear market bounce but after the first week it seems that the bulls are losing steam. Maybe once the jobs data is out of the way, we'll get a clearer picture.

Susan said...

Thanks Jamie. I totally agree that it is better to stay away from swing till the market stabilizes a bit. Hopefully by the time my husband gets some knowledge on swing trade, markets will be once again ready for swing trades.

I am waiting to see how you traded CNQ today. I traded CNQ but got out early. BTU was a decent gainer. It has been 8 months I started trading full time and I am still terrible, rather very terrible with targets. I should and will be concentrating on this.

Susan

Jamie said...

Susan,

Yeah, I was stopped out of CNQ too. Set my stop above the retracement zone and it was hit. BTU was also nice. Setting targets is difficult unless you scope out the wide range to map out S/R. Fibonacci helps with targets and chart patterns usually return 100%.