Just a quick update on the days trading and some setups. I get questions quite often on how to know if the action is a short or a long. Today's action offered a good opportunity to review what I see and how to pick your bias. I start rambling a bit later in the video, but bear with me. Hope it is useful to you...
Answering an email regarding setups on Friday and the week in review... Hope you had a great weeks trading!
First, finally got the quick drop I've been predicting for the last couple of weeks. Always love a good bearish day! As you may or may not seen on the "store" page, I've been working on the "Finding S/R Zones Guide Book" and decided a good way to convey information was to include a few videos of me finding levels for the next day. If a picture is worth a thousand words, a video is worth a thousand pictures I guess! Anyway, I finished day three today and thought I'd include a sneak peak of the first few minutes to give you a little taste of what I'll be releasing in the near future. The book is really taking shape and I think it will be really helpful. That said, hope you got a piece of the day, I had a good day today... Love those shorts!
What a nice week trading. Hope you all got a piece of it. A quick update on some CME changes and how FOMC played out like expected with a rally followed up by a big dump... Now we just need to see some follow through to confirm the bigger picture bear. One way to play these longer term moves is with some straight options. I used a separate broker for these in the past but with all the updates to TradeStation lately, they have made major strides in the option area on the platform. I'll be changing over to this in the near term I think so if anyone has some suggestions on using TS OptionStation, I'm all ears...
Other than that, have a great week, should be a good one!
Action this week is a little subdued, likely because of the looming FOMC coming on Thursday. I actually enjoyed the lazier action so far, doesn’t have my nerves on-end as much as the last couple of weeks.
Quick trade update today after a nice trending day up. Based on the context, longs were in the cards early and remember that means that we’re waiting for our S/R levels to be broken to the upside and buying pullbacks until the nature changes. I started the day earlier than usual, with my first trade long at 8:35 AM, then followed up with a long at 8:50 AM (1 and 2). The first I was able to scalp out with 1-1/2 points (per lot) then 7 points on the next. Since the action was calm the last few days I increased my lot size back up to 3 contracts instead of 2. I stopped after that, not wanting to look a gift horse in the mouth, and of course there was a dandy setup at (3) twenty minutes later. That run was fast and never looked back until it hit the next resistance zone to the tick, and the sellers stepped in and the buyers took profits… That little move would have been worth about 5 points. There was a risky short at (4) which would not have worked out, but then flipped up for a continuation of the uptrend at (5) for another 4 possible points. From there we turned to molasses, a great place to get chopped up and give back the days profits. Fortunately there weren’t any great setups until later at (6) which was by the e-book, and could have netted another 5-6 points by the time we hit the next resistance zone. So overall a good day for EminiEdge traders, and the zones pulled their weight for us today.
Keep in mind that with the FOMC comes some sporadic action that is worth standing aside for as shown in a previous update “Trends, FOMC and Achilles Heel...” Wednesday will likely soften fairly early so watch out for the possible chop. Followers know that I’m more of a “perma-bear” than not, but in my opinion we’re not in a normal correction here. Bigger picture still points to a longer term pullback still coming ... “Short Covering Move or is the Correction Over?” It seems that the FOMC is the perfect time to trap all those off guard traders who think the market only goes up. Be ready for some fits and starts on Wednesday and possible shake-out Thursday, and remember “Trade What You See, Not What You Think!”
I thought it was time to answer a few rollover questions as asked by EminiEdge followers. Been meaning to get this out for a while and just haven't taken the time. Hope it is useful to you...
Good Trades, Trader 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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