Last week's trading started with a wrong bias on ES, which was published on thanksgiving day. But, after taking the stop losses immediately, the rest of the week has been highly successful, as ES moved between my support and resistance numbers. So, overall i am considering last week to be successful blog articles. (Note that i publish intraday or daily updates as comments. I put in these comments in the last 2 blog articles every week). Since members do not get 'auto-update email' when a comment is published, i have decided to send out a group email, whenever i update with a comment.
As of this sunday afternoon, there is no major news releases that could move markets in a major way.
- On monday there is a lunch meeting between german and french leaders, in preparation for Dec. 9th meeting of EU political leaders.
- ECB meeting could potentially release some form of action, if there is an accord from the monday meeting of french and german leaders.
- In the US, there is no major economic data, until thursday/friday. On friday US trade data, which is the biggest piece of economic data for this week, in USA.
So, it is quite likely that the major move of this week will come in the second half of this week, rather than monday/tuesday. I have not checked the major news expected out of asia for this week, since i am not associating much weightage to asia right now.
So, for this week, i am presenting my trading plan for the week ahead. My support and resistance levels (published on Dec.1st) have not changed. As i noted in that article, i am more precise with the support levels but the resistance levels may have a few points of error (as witnessed in last friday's NY session). But, my trading sticks to my numbers (for reasons of risk management properly).
Technical Analysis:
I beleive that market is bullish for december to test highs. My year end estimate of 1290 on ES will be seen sometime during december (even if we do not finish year end there). The central bank intervention last week puts a floor below ES for this week near my support level of 1216.5. Note that this is exactly the target for my longs, as declared in a comment on monday, november 28th at 11.30am, (when ES was 1192 and below). If you continue reading those comments, you will see that i was considering shorts if ES pushes above 1260. This happened on friday, and following the resistance levels posted, i am holding short 1260 and 1249, going into second week of december. So, even though i am bullish for december, i am trying to play a potential down move, before any push higher is possible.
Capturing Short side of the market:
During monday NY opening, if market takes a bullish direction and ES reaches 1260, my swing shorts from last week will take a 5.5 point stop loss. This is acceptable, since my risk/reward criteria is justified with a potential move to my second support near 1230.5. I am planning on covering these shorts near 1230.5 support area, depending on market action on monday/tuesday.
Capturing Long side move:
I plan to wait and see market action around 1230-1226 and assess news breakouts on monday, to get ready for a potential move up. Buys will be initated near my support levels near 1217 and 1225, which will be sold at 1269.5, as my high probability (80%) trade of this week. IFF i am able to get entry near 1217, i would consider holding half of this long position for higher level resistances for year end target of 1290. I will make a decision on this, based on developments during the week. I will take the long positions using January options, to capture the potential up move as much as possible.
Stop loss for these longs = 1208 area in december.
Futures market is not yet open this sunday evening, and ES is at 1244, friday's close.
10 comments:
ES gapped up just now in sunday's opening, and the intermediate resistance level at 1254 has been shorted, with a stop loss at 1256.5 few minutes ago.
Exited the shorts, as ES looks like it wants to push a bit more higher than 1254 during european open, on italian budget cut news. I will reassess the charts premarket monday, and post my thoughts.
So, my high probability number of the week (1269.5) is about to be reached soon, this monday, rather than later in the week. The mistake in last friday's swing entries was choosing the short side too early, as i under estimated the power of the herd (of sheep) that would follow a slaughterer to the final destination. I have no idea when the slaughter would commence, so i stand aside from the herd. These were my thoughts at opening today, that i couldnt publish, but the pullback from top to current 1255 is yet another confirmation of my thoughts about what lies ahead. I did not take short swing yet, since i did not get my expected price over 1269.5 as an entry point.
Decided to create a hedged position afterhours, at 1252, and hoping to catch the volatility of tomorrow. Prepared to adjust/fine tune it tomorrow and day after, depending on which direction market takes.
closed the long end of the hedge from yesterday above my resistance level of 1260 premarket now, and letting the short side run, possibily into closing of today. Will take loss upon only upon exceeding 1263, in order to avoid getting whipsawed like yesterday stop loss (which was really a good short if i had let it run into closing). Target is below 1242.
Correction: 1st target is 1242.5 and currently ES is 1256 premarket. I will consider lower targets depending on opening of tuesday.
There is news of more serious efforts to at the EU summit on friday, and with break of highs, ES has continued to grind up. I day traded yesterday, and intend to do the same today with support at 1256.5 and resistances at my weekend estimate of 1269.5 as well as 1276(area). Yesterday my swing shorts hit the stop loss again at 1263, but that was neutralized by the day trades in closing hour.
Pardon the typos in my comments; still sleepy - in previous comment i meant "serious efforts to be done on friday by EU leaders to stop the euro crisis". And they are addressing the issue on a short term as well as long term basis, which is good. But trading the range has been effective this week in day trades.
i am typing up these comments half way through my sleep; so missing some ideas..... for the previous bullish idea of wednesday, 1251.5 is my stop loss. Since target lies well above, the risk reward on this stop loss is justified. I am also planning on one more add at 1252, if we get there in NY opening, but it would be a low probability event, if my theory for today is right.
still sleepy, and brain not fully functional:-) closer check shows support at 1253.5 should be pretty strong (and quite likely wont be reached if the bullish case for opening hours is correct). As of now, the support i mentioned has been reached and holding it there now.
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