Let's Take a Test Drive by Pay$ense

I do not have all the fancy tools many of you have, but what do you think?

The intra-day levels show that the YM, NQ and ES have now moved past the Line In The Sand and have traded below the "break down" level.

Are you buying it? What I mean is do you see this as a breakdown or a head-fake?

We shall see, lol.

That is for me the best way to not get ahead of myself - especially in a Bear Market - or step into some deep drawdown.

For now I have a bullish bias (from a macro perspective) and am going to have to be content (i.e. be patient) and let the market prove this.

Will we pull back up and close higher or will we pull all the way down to Joe's "ultimate target" or extension?!?

Will we ultimately break through the 917 overhead support and move to the next level? Or (as we have seen) will support again break to move substantially lower than 874?

Perhaps not and the bull trend will remain in tact and if that level holds perhaps we can again test and break through 917 support.

For now I have my LONGS hedged with SHORTS and may take profits at the extreme swings or simply close one and add to the other. Either way I am still light and won't be severely hurt either way.

Like I said, the market has to prove itself to me and "we shall see". Meanwhile, while I am typing total chaos can erupt at any time! IOW the volatility daytraders crave - I don't necessarily care for - but (for now) have to learn to live with it.

:eek:
 
For now...what I am seeing is lower highs and lower lows in our decent to the 874 profit target - then a sharp rebound to close substantially higher around the 895-900 range (still down for the day).

Hedge fund redemptions? Maybe we will totally break down. I don't know. But I closed one SHORT (target: 886.25, $875) in one of two futures accounts and will now toggle over to the other and do the same.

Correction: NQ did not trade through the break down level along with the YM and ES. It has outperformed (declined less) than the other two and it's strength in buying may be what puts a floor under losses for today.

OK so while I was typing we saw a shift in the intra-day downtrend broken and we now have a higher high and a higher low - I hadn't put in a market order to close my SHORT EMD contract so that is now done (target: 508.20, $520) at a somewhat less favorable price - but we've moved up with my LONG.

Pheww!!

As you may have noticed the EOD (last hour) action has been totally unpredictable (i.e. PPT). All bets are off for me to try and "scalp" any gains!
 
With the market wanting to look like it is at a <b><i>crossroads. . .</i></b>

I'll leave 1NQ LONG (overnight) in a $40k account (it is up $20k since March 2008).

In another account I am "hedging" my 1EMD LONG with 2NQ SHORT. If we go up in the next 10 minutes I will add another 1NQ SHORT.

If we tank or stay flat I will still add another 1NQ SHORT. This $76k account is up $41k since March 2008: uncertainty.

With 5 minutes to go for the NYSE close, we may "print" 895-900 from 890?!? Or even 880: "wild & crazy"!

pay$

Edit: scratch that extra SHORT NQ contract. 2NQ is "hedging" 1EMD alright for the overnight hold.

No wonder I lose sleep. I will be monitoring the overnight futures and take profits if opportune. Must am staying safe so can rest easy.

:confused:

Hey! The market "obeyed" and simply closed near the low, lol: getting a bit less uncertain?
 
Quote from paysense:

No wonder I lose sleep. I will be monitoring the overnight futures and take profits if opportune. Must am staying safe so can rest easy.
More...
Sounds like a great way to trade, LOL. :) :D
 
LOL - back from my fitful afternoon rest. Looks like futures are "behaving" with <i>only</i> a 5 point trading range.

My higher margin account is basically FLAT with the NQ hedge. Until I see further conviction on the part of larger investors, I'll be similarly positioned.

Today, I heard it put this way by a gal named Liz Miller: "Caution with a positive bias". Sounds about right.

:(

It was a typo <b>Mandelbrot</b>, but I'm staying safe, rather than sorry - at least until we get out of the woods.

I will not much bore you with the intra-day PA thought process. Perhaps I can post some trades w/stops, profit targets and blotter.
 
Summary
07-Dec to 09-Dec
(higher margin account)

<b>$2,342</b>

I know I said I am a "swing" trader (I am trying to establish my LONG positions), but knowing the s/r levels along with the still uncertain volatility - I have opted to take some profits.

I will like to present a calculation to show the potential profit (along with the trades) that can be made from holding and adding to an e-mini futures contract position (once the market can continue to rally off a "bottom").

paysense
 

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Finally done with evening analysis.

Bullish MACRO trend bias continues to look positive so I BTC 1NQ (remember "hedge") in one account and BTO 1NQ in other account.

Ultimately I'd like to phase into 3X the 2NQ position in that account - if the market allows. Here is the calculation.

Let's say the market can rally 3-4 months. Historically these bullish and bearish trends occur most often, yet are broken up by corrections.

So let's say (in addition to 1ES contract now open) the ES can rally another 25% in that time-frame from 890 to 1112.5.

Let's say I put on another ES contract (typically I'd diversify and hold 1ES, 2NQ & 1YM) when when it breaks through the 917 area and another ES contract at (I'm guessing) the 935 area.

Calculate: 1ES from 890 to 917 = $1,350
1ES add (total 2) from 917 - 935 = $1,800
1ES add (total 3) from 935 - 1112.5 = $26,625

Total: $29,775

Thus far my accounts have doubled (20k to 40k & 35k to 76k) in about 9 months, since we have not had any prolonged uptrend (bear trends need more caution and are more trickier).

Proper money management does however dictate that with gains a <i>constant level of exposure be maintained</i>.

So since the accounts are at 40k and 76k I may need to now phase into a 3 contract holding. But as the trend confirms - with increased equity - this <b> leverage constant</b> may dictate I need to put on another contract (total 4) at a certain level and perhaps another contract at the next level - so the possible $30k gain may indeed be $40k+.

That would be another 100% return - not over 9 months, but over 3-4 months. As indexes top out - leverage will be properly maintained and contracts pared back lessening exposure. When they enter a correction I try to then capture gains by shifting to a bearish or SHORT bias.

Adding things up I determine that and APR of around 250% is possible when all bull and bear phases are taken into account. When in doubt (increased volatility, extended gains, etc.) I typically hedge with call and put options. This is to minimize drawdown periods since I do not want to totally close everything out EOD.

Hope this helps to understand. I will share more about personal metrics I've met to arrive to the present. I have found that it is viable to continue to accurately analyze and trade these macro market trends.

The next metric to achieve is to once again get an <i>actual bottom</i>, target it properly, profit from it and increase current APR (165% compounded) to the higher 250% level. As long as my goals keep getting met I can continue to share my ideas along the way.

paysense
 
Well another night (during this high vix - volatility index - period) goes by and open LONG e-mini future contracts are fine.

Yep - no hard STOPS, but light enough not to cause too much concern. Tell that to my REM sleep!

Anyway, perceived strength continues to be just that and overhead resistance hasn't gone anywhere.

Hmmm let's see Joe Baker's intra-day levels. Yep (although contains a typo) - the BO (break out) level is 902.5 (ES) with an UT (ultimate target) of 922.25.

In the pre-market, the futures have TWICE spiked above the 902 level ad both times have pulled back to ~900.

Let's see if volume (institutional buyers) step into the market today. . .or not. :cool:

Since the market most always does the opposite of what we expect we'll note the BD (break down) level of 878.75 with an UT (ultimate target) of 858.75.
 

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