ES Tuesday 3-6-12

Kicking off Tuesday's trading topic with a question:

What would Bruce do?

It's an easy game and designed to make you think and become a better trader. Feel free to replace Bruce with KoolBlue or Monkey Meat or any other trader that you follow, understand or wish to emulate.

Before, at or after the market open and then at any time during the trading day ask yourself what that trader would do at this point. Post your trade (or non-trade) with the reason that you would have (or would not have) taken it. If you're learning and not posting an actual trade then say something like "I would have gone short here if I were trading real money because we hit up against the triples on..." etc.

If you see someone comment on a possible trade setup that you recognize then reply and confirm that you agree with the setup or what you think the setup should have been or why it is invalid.

Think of this as your midterm. You've been reading these topics for days, weeks, months or years. Now try it out and get feedback from your peers (hopefully).

Good luck everyone!

I'm taking longs down here now below 41 with the assumption that they will at least want to retest peak volume of the yearly at 42.75....my plan is to be more agressive if they can print 1338...ideal would be a flush of volume down into that price with an air pocket above..

For Today, Thinkorswim pivots using RTH data show the exact same that Paul has for S2 up thru R2. S3 and R3 show different values though ... 1344.67 and 1381.67 fwiw.

Originally posted by BruceM

your S3 seems off for today Paul...

Originally posted by PAUL9

I calculate the RTH pivots daily (based on 4:15 Close)

Today, Prior1
R3, 1377.58, 1381.08,
R2, 1372.42, 1377.17,
R1, 1368.33, 1372.83,
PP, 1363.17, 1368.92,
S1, 1359.08, 1364.58,
S2, 1353.92, 1360.67,
S3, 1349.83, 1356.33,

plan is to keep it small and take something off at 42.75 then try to hold SOMETHING to go get that 46.50 gap in data..when u don't have much on it is harder to hold runners..at least 4 me it is

This is a type of day where I would never go long - Its also the type of day where you would go short and stay short till a major level has been reached and the move is never less than 5pts often 10+pts. If you did go long, don't expect much on the upside.

The big clue is the VOLD. It gives lots of information if you know how to interpret it:

You see the smooth line on the 5min? Often when this pattern forms in the 1'st 20min or so from the opening, it remains intact the rest of the day 75-80% of the time.. This pattern has not formed in some time but it will again when the market gets volatile. It will also give you with remarkable accuracy the type of day that is likely to form - Its not 100% but statistically very significant for directional bias..

how bout a chart when u have time jedi..that would be cool..interesting comments...if you sold at the open u wouldn't even have 10 points target and most don't sell the open so how and why and where did u sell, where is your stop and target..

I appreciate your comments but how do we enter short right now ?

not trying to be a wise guy it's just that these conflciting opinions is what makes the market so interesting....so please expand your thinking for us when you have time and thanks for posting

Originally posted by Jedi

This is a type of day where I would never go long - Its also the type of day where you would go short and stay short till a major level has been reached and the move is never less than 5pts often 10+pts. If you did go long, don't expect much on the upside.

The big clue is the VOLD. It gives lots of information if you know how to interpret it:

You see the smooth line on the 5min? Often when this pattern forms in the 1'st 20min or so from the opening, it remains intact the rest of the day 75-80% of the time.. This pattern has not formed in some time but it will again when the market gets volatile. It will also give you with remarkable accuracy the type of day that is likely to form - Its not 100% but statistically very significant for directional bias..

what fascinates me is that I can see nothing but long trades now...with vwap equal to PVP, the gap in the data up at 46.50 and hitting down against a major peak volume price...with weekly and daily pivots here...

love these battles in the market..

Bruce,
Very good point. I actually have not been trading ES for a while and have been trading CL recently so I did not take any trades in ES. However, I did very well with ES last year with this clue. I used it in conjunction with your fade methods.. It basically went like this:

- When the VOLD is "smooth" and one sided on the 5min within the 1'st 20-25min of the opening, I look for a pullback and try to get in on a good location and HOLD for a reasonable target.
- When the VOLD is "choppy" and 2 sided in the 1'st 20min or so, I expect a 2 sided market and fade the LVN

IF you want to be aggressive, often, I would goto a 1min chart at the opening and do the same with 1min (ignoring the 1'st min) when the market opens at a level. I would watch the 1min VOLD for smooth directional moves and when price fades the other direction, I would take the trade and stay in it and watch the 5min VOLD to see if this pattern forms. If it does, I hold. If it doesn't, I will either exit early or take a loss..

Going back to the way I was trading the ES, I would pass on the long trades and if it goes up, I would look for a place to go short almost like a reverse single print set up and trust the market to continue its direction/behavior..

The idea is that the buying or selling is CONSISTENT and I will assume continuation..

However, this method is not 100% and its often wrong. Its better to use it where there is more volatility. The longer term trend is still very much intact.. Had this pattern formed to the upside, the odds would be even better..

ITs a good thing to watch to avoid getting caught in potential trends.. The odds are much enhanced with this pattern on the VOLD.. There's more to it if you also incorporate the ADD but that's the key pattern.

I will use the VWAP on 2 sided days. On one sided days where I will "assume" this to be, I won't use the VWAP bands but will assume VWAP to be S/R towards the trend

great stuff. Thanks for taking the time with that reply...


another test of 41 right now will stop my runners out and I will be forced to look for longs at lower prices below todays lows.

otherwise I will target 45 print as I will not let a gap in data make me suffer

$ ticks trying to change their distribution

Jedi , I was wondering if you ever tracked what was happening with the Cummulative delta in the ES with the $vold? Never compared them but think it might make for some interesting study

NP, I shared because you shared.. This pattern forms about 15-20% of the time, which is consistent to how often the market trends. Fading is absolutely the more probable trade most of the time but this can help faders avoid getting caught in trends.

In fades, I scalp as well.. In trend days, I hold and last year, it was not uncommon for me to take 10-20 pts on these moves.. There actually much more to it where you can also predict with statistical advantage the probability of a level holding and breaking. Last year, I often took trades into S/R expecting them to break.. Its all possible.. but it works best when volatility picks up.. Till then, I'm only trading CL and watching ES..

Originally posted by BruceM

great trade Horse...it's all cool APK..thanks for the recap..

final contract exit at 42.50.

thanks bruce! have a lot of respect for you and your thoughts for longs today added some conviction to my trade idea. when we have such a strong long term timeframe, it's easier to side with them, even on a day like today!

will be interesting to see what happens tomorrow.