ES Journal Archive (2006 - 2008)

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This is a brutal market environment : SPX down 40% this year; the worst bear market since 1930s.

Many of the so-called experts have their heads handed to them, no one can call this market correctly even 50 % of the times. Conventional indicators have failed, oversold can become more oversold and even more as markets decline rapidly.

S&R can provide indications where entries/exits can be done but even these fall by thge wayside in the face of relentless selling. Normal stops for ES scalping and day trade e.g. 5-point stops, are simply noise... unless you are super disciplined, patient, and able to manage trades it would better to stay away from trading at this time. Also, you can reduce size - 5 ES instead of 10; take profits quickly, partially so that you are not exposed with your full position, and get away from you PC while trades are on, especially scalping/day trades.

I have started trading after hours - never done this before but there are good moves in the index futures in Globex and lows/highs are made as other markets react to Wall St moves a few hours earlier.

For IT and LT trades: Look for good stocks, especially those that have already reported, eg JPM, buy and be prepared to tolerate 20% or more declines. Or, else park the cash and wait.
 
Quote from Jahajee:

Conventional indicators have failed, oversold can become more oversold and even more as markets decline rapidly.
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As a true J. Murphy follower I would not be able to agree about conventional indicators failing unless you state which time-frame you are referring to. Secondly, an indicator like RSI/CCI/ Stoch may remain oversold for quite some time, that doesn't mean to say that conditions are out of the ordinary, in fact it is the norm. That is why I don't use them for timing, I would glance at them, but for timing market turns nothing beats histogram as far as I am concerned, as long as we are talking about indicator usage & not price, 'price only' dictatorship does not need to get annoyed :)
 
Quote from Jahajee:

This is a brutal market environment : SPX down 40% this year; the worst bear market since 1930s.

Many of the so-called experts have their heads handed to them, no one can call this market correctly even 50 % of the times. Conventional indicators have failed, oversold can become more oversold and even more as markets decline rapidly.

S&R can provide indications where entries/exits can be done but even these fall by thge wayside in the face of relentless selling. Normal stops for ES scalping and day trade e.g. 5-point stops, are simply noise... unless you are super disciplined, patient, and able to manage trades it would better to stay away from trading at this time. Also, you can reduce size - 5 ES instead of 10; take profits quickly, partially so that you are not exposed with your full position, and get away from you PC while trades are on, especially scalping/day trades.

I have started trading after hours - never done this before but there are good moves in the index futures in Globex and lows/highs are made as other markets react to Wall St moves a few hours earlier.

For IT and LT trades: Look for good stocks, especially those that have already reported, eg JPM, buy and be prepared to tolerate 20% or more declines. Or, else park the cash and wait.
More...

I'd add the use of ETF's as well. SPY & SDS can be used in lieu of ES. I like them for timing purposes and the fact that they are more effecient than the ES.
 
i've been away for a few days. figured tuesday's gap and crap was my last chance to sell my bottom-feeding longs, and it's interesting how i managed to nail that one on the head.

50% fib retracement leaves us at 1065, the high of tuesday. (actually, 1067 was the high, but who's splitting hairs)

kind of surprised to find so many folks trying to pick a bottom after tuesday. i figured that we'd have to see AT LEAST 800's before another bounce and possibly lower. hate to bust anybody's bubble, but i think AT LEAST one more down day before a bounce. we may even go below 800, but probably not on this drop (i.e., later). i'm sidelined for now....

kind of keeping volente's smart money/dumb money 3-4 day rule in my head.:D
 
I was on the treadmill ignoring my small swing short trade less I be tempted to cover when Bernanke started speaking.
I literally almost broke my leg when I missed a step when he said this:

“The crisis will end when comprehensive responses by political and financial leaders restore that trust, bringing investors back into the market and allowing the normal business of extending credit to households and firms to resume.”

That is one of the scariest things I have ever heard in my 19 years of trading.
So apparently this crisis won’t end when the overleveraging is reduced, excessive debt controlled, CDOs and the like correctly valued, the housing market stabilizes, etc. According to our Fed chairman it will end when obviously incompetent government intervention convinces people to “trust” in that intervention. Needless to say I have yet to cover my short.
 
Quote from supernaut:

just spent 15 minutes cleaning up this Thread
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The reason why you need to create newer and newer ignore lists is, because you keep creating new handles Blackguard. Also I have to keep putting YOU on Ignore, so could you just stick to one handle? Thanks for your consideration....

Going back to topic, we have the 2nd downgap in a row...
 
LC posted an example of 10 million shares of stock needing to be sold and the broker waiting all day for bounces to sell into,common sense would have told us,if we weren't hanging on every little bit of news,that if the banks won't lend and are going broke,then so must be their customers,there must be hundreds of smaller outfits with under 500 million in capital that are liquidating for margin reasons,today was an orderly downmarch,no panic,until the close ,when LC's imaginary broker dumped the balance he had to be out of by the end of the day,I am not making any calls here,but that may have been liquidation and if that customer is done,we could rally tommorrow,there must be a ton of short stock out there that needs to be bought back for expiration of options
 
Wouldn't be surprised if market opens ***HIGHER***, that is above 904, then moves down to test 884, and then moves higher.

But, this is too bullish for current gloomy test_835 SPX sentiments.

GOOG and C reporting BEFORE start of regular session.
 
Quote from JSSPMK:

Are you positive on this one?
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You mean if it is the 2nd in row (yes) or if it is going to play out (hope so) according to the rule? Also closing the gap doesn't mean we can not go still lower later on...

Although we overshot my expected bottom, I am not surprized. We overshot my top too, but eventually I was right with the pattern.

I expect to get this rally to get going, probably/hopefully tomorrow. Otherwise I might as well start to buy canned soup...
 
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