Just a quick video talking about the weeks trades and the bounce we have had in the last few days. Had a few nice setups in the sideways day, suddenly 15 point day is "sideways"... Hope you all had a good week. Looking forward to a little less volatility, I hope...
What a week!! After a nearly 400 point down move on the ES the market had what I think is a short covering bounce for the last couple of days. The news media is wetting themselves talking about the "recovery" of the breakdown and "it was only a needed correction." Not so fast, we're not really out of the woods yet technically. The market internals that were incredibly bullish the last few day have already started to turn, and could be ready for another leg down in the next few days. Remember that the market is most bullish at a top and I'm not convinced that we won't have another shot at a low before we're out of steam.
The EminiEdge Zones contained the action excellent today, but with the expanded volatility don't forget to bump up the stops and targets. The less experienced may want to paper trade this yet as a little bounce could be a big loss in no time. The market action had some textbook (EminiEdge Textbook of course!) setups today. The first setup was in the first 15 minutes of the day and was good for a quick 10 points with no heat. That's the way to start the day! After the market bounced there was an entry at 2, with about 12 points here... That's enough for me, but there were two more shorts next for a little reversal setup at 3 and 4, setups related to each other for a couple of points on the first and an easy 3-4 points on the last. At 5 there was another reversal setup which was an excellent setup but didn't quite take off like we hoped, but a few points if you were quick to cover. Lastly there was a nice continuation trade at 6, for an incredibly quick 8 points before there was a snap back to kick us out.before head for an untradable "V" bottom (for me anyway) and an incredible bounce from a new low to a new high for the day in the last hour. Yikes! If we can't get through about 1992 early tomorrow, I'd expect us to take back the a good chunk of the gains of today before settling down for tomorrow... Time will tell, but Trade What You See, Not What You Think!
Good Trades, Joe
All I can say is it's about time! I've been talking about the selloff coming based on the action and internals and we finally got it in the last few days (see discussion about that under "Small Range but Good Profits"). Ranges are expanded to about 5 times normal and moves are quick. Keep those stops out of the way and profit targets big. This volatility isn't for the faint of heart, sometimes it's better to step back and protect the capital until the irrational exuberance wanes. In the video I talk about how to expand the targets and stops as well as multiple setups right out of the EminiEdge Manual. Sorry it's a bit long, sometimes I ramble a bit...
Finally the fireworks day we've been waiting for! At current writing, the Emini is down 32 points, and may not be the bottom yet... Saw another zebra stampede while I was putting this video together and so I talk about that a bit as well. The S/R zones were on the button today, generously netting 27+ points per lot out of two decent trades. Had a couple of small loss/gains earlier in the morning but the last two worked out beautifully. I would not be surprised to see the market sell off near the end of the day as some of the action I saw around 9:00 AM led me to believe that there was MAJOR dumping going on that isn't short term. There were some prints on the tape that seemed like an error, but if not, it may be a major top in for a while. We had 2M+ contracts traded yesterday and if we get it again today it may be pointing to a significant event long term. I'll keep trading the short term patterns and don't really care what direction, as long as I an get aboard some volatility! Hope you got a piece of it... In case you're wondering (probably not!) The fireworks picture was from my new camera on Independence Day, this fourth of July....
Friday presented with a choppy start, winding up 8.75 points for the day. With only .88M contracts traded, lower than normal volume made this seem incredibly slow, though compared to the "Rocket Day" most action would seem reserved. The internals are pointing down, so maybe this is the start of a longer term top. I'll still trade the long side but something is off, seems like we could get a selloff any second... I started the day with a breakeven at 1, then followed up with a profitable short trade at 2, with a perfect exit being right at the next support (first red circle) Once this looked like the sell-off was over for the day, a perfect, "by the book" entry long at 3 (page 27 and 28) and again profits taken at the resistance level (next red circle). That was enough for me for the day but there was another decent short entry at 4, but the strength kept us from getting more than a couple of points if we were quick to cover. One more nice entry long in the afternoon at 5 "by the book" (page 29 to be exact) and you were rewarded with 4 more points if you were patient enough to still be trading (Good for you!)... Overall a nice day and reading the S/R levels kept us on the right side of the market and pointed to the profit taking areas as well. ...Again, our S/R levels were right on the button! Hope you all had a great day and got a piece of it!
Good Trades -Joe
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"Trader Joe" trades the Emini S&P exclusively and is the main influence behind EminEdge.com.
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