Emini Day Trading Diary

5 minutes Nasdaq Emini 100

Hi,

The market has been relatively quiet these few days... Hey,, Chritmas, New Year,,,, traders got to take a break too right? Today's trade is taking advantage of the continuity from yesterday's development.... notice that near to yesterday's closing bell, there's a hammer ? this is followed by price shooting up and approaching the moving averages...

Today at the opening bell,, price gapped up slightly by 1 point, it met with some resistance at the moving averages and basically shot up.... this can be confirmed by stochastics moving from the oversold region and short-term MACD crossing the zero line and also the mid-term MACD crossing it's signal line...

I longed 1 contract at 1779 and another 2 contracts at 1782... I was not too greedy... my profit target was realistically set at 1790... remember,,, after all we are going long in a downtrend environment now... even if a downtrend can't be confirmed.. its definitely not an uptrend.... better not be too greedy and take money off the table while you can... at 10:00... my profit target was hit and I am out with $540 profits... not bad eh? for a 20 minutes trade...

Happy New Year
Good Trading for 2007 too. :)

Posted by Michael Taylor at 5:24 PM | Permalink | Comments (0) | TrackBacks (0)

5 minutes Nasdaq Emini 100

Hi,

How's the first day of trade after christmas? market's not moving at all. I didn't trade today... yeah.. still basking in post christmas mood... but market did break out from a triangle and if the trend continues, we can expect to go long... Anyway,, the break out was too close to market closing time.. so there's really nothing I could do even if I was actively monitoring the markets...

Posted by Michael Taylor at 5:50 PM | Permalink | Comments (0) | TrackBacks (0)

Hi,

Yesterday I said it is more logical to go short rather than long? Well, fundamental data released today seems to suggest otherwise. Core personal consumption expenditure (PCE) deflator which is an indicator of inflation is flat at 0.0%. This means that infation is under control.. and we know that that is exactly what the FED has been trying to do.. i.e. control inflation... So a lower rate of inflation means that the FED will relax its monetary policy and is more probable to reduce interest rates in early 2007... This is a long term "good news" for the market.

Well, That's the fundamental analysis... if you believe that crap, and go long today.. you will be killed... I don't disagree that in the long term it might be good, but I have to base my judgement on what the charts tell me....

5min Nasdaq 100 Emini

Daily Nasdaq 100 Emini

Today's trade is similar to yesterday's.... I already know that if anything, I will have to go short, long is a NO NO.... At 10:30, I shorted 1 contract at 1782.5 when price bounced off the moving averages and stochastic begin to twitch down from the overbought region... At 11:10, I shorted another 2 contracts at 1777.5 ... I covered my position at 1770 at 12:30 when price action showed some weakness.... Profits of $550... Notice that during this festive season... the volume of trading is light....well, I think I should be buying christmas presents also instead of trading... :P..

From Briefing:
The November core personal consumption expenditure (PCE) deflator was flat (0.0%). This follows 0.2% gains in September and October. It confirms that the November core CPI at 0.0% as released last week was not a bad read. Inflation pressures are definitely moderating as a result of slower economic growth.

This is very positive long-term for the stock market. It increases the likelihood that the Fed will ease in early 2007.

Less favorable news comes from the November durable goods data. Although total orders jumped a larger-than-expected 1.9%, the underlying trend is soft. Excluding the volatile transportation component, orders dropped 1.1%. This follows a 1.6% decline in October. Overall orders are now up only 0.3% on a year-over-year basis, down from 10% levels earlier this year.

Businesses are becoming more cautious and slower order growth means slower business investment growth in the GDP numbers. This is one reason real GDP growth will stay near the 2% annual rate of the third quarter for a few more quarters.

Posted by Michael Taylor at 5:35 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq Emini 100

Daily Nasdaq Emini 100

Hi,

How's it going lately? Its a difficult time to go long these days... In fact, its better to stay out of the markets if you are not sure...The uptrend is no longer in tact ( see the daily chart) Its logical to go short...

Not much market moving news... you can refer to the excerpt from briefing below

Today's play is purely technical. We can see a slight rally in the market with price reflecting down from the moving averages.. furthermore, stochastics seems to suggest the same thing and turned down from the overbought region... I shorted 1 contract at 1798.5 and another 2 more contracts at 1794 at 12:15... The downtrend is further confirmed by the short-term MACD cutting the zero line..... and futher confirmed by the mid-term MACD cutting its smoothed moving average
... I got out at 13:00 pm at 1783.5 with a $760 profits... This is not a difficult trade.. I hope you captured it too.

Briefing.com:
There is a fair amount of news, but nothing dramatic. Third quarter real GDP growth was revised to a 2.0% annual rate from 2.2% and the deflator a touch higher to 1.9% from 1.8%. None of this will alter fourth quarter or 2007 expectations

Posted by Michael Taylor at 5:36 PM | Permalink | Comments (0) | TrackBacks (0)

5 minutes Nasdaq 100 Emini Futures

Hi,

How's it going? Today price gapped up by almost 15 points due to better than expected CPI data. While what do we mean by better than expected? A bunch of economists expected the november CPI to increase by 0.2% but actual data turns out that the Novement CPI is unchanged. If you remembered economics 101, CPI is a measure of inflation, higher CPI means higher inflation, and we know inflation is the enemy of the FED, if inflation increases the FED keeps on hiking rate. They have been talking about a soft-landing and to curb inflationary pressures.. Hence, this lower CPI number is actually a good sign that inflation is under control and that the FED engineered soft-landing is happening..

Mumbo jumbo to you? Well, that's just the theorectical background for you to appreciate... Traders don't really need that.. and we don't act on that info alone.. All we have to know is,,, gap up due to some better than expected data,,, and IS THIS GAP GOING TO CLOSE? OR IS IT GOING TO BE A RUNAWAY GAP? ya, thats all we need to know...

There was a knee jerk reaction to close the gap... I didn't enter... and price bounced back... At 10:40, I finally decide to short 1 contract at 1840, after confirming weakness in price action and a downturn in stochastics... risk-reward is good, my stop loss is at 1845, above the high of the day and reward,, you know, its the whole distance of the gap of around 15 points.. at 12:00, I shorted another 2 contracts at 1838.... and this time round, it really went plunging... ya, it's a good feeling to know that you are right immediately after shorting it.... Finally at 13:40, I decided to get out at 1828. Although price did not close the gap,, it touched the moving average and robounced.... I am not going to risk my profits for those additional 2 points until it closes the gap... I exited and reaped $640 profits... enough for the day!

From Briefing.com
This morning, there is bullish news to help. The November core CPI was unchanged. That was lower than the expected 0.2% gain, and brought the year-over-year increase down to 2.6%. It follows a 0.1% increase in October and three 0.2% increases before that. There were a couple 0.3% gains prior to that. So, the trend is clearly good. Inflationary pressures are moderating.

The component breakdown shows widespread weakness. The very low number was helped by large declines in apparel and auto prices that won't continue. But telephone services, computers, recreation, and medical care also showed lower inflation trends. The owner's equivalent rent jumped another 0.3%, but even that wasn't able to offset the broad weakness.

The Fed's soft landing is working. Inflation is easing even while economic growth remains decent (apart from housing). This will fuel speculation that the Fed will cut rates in early 2007. The market may be getting ahead of itself in that regard, but for now, the implications are bullish.

Posted by Michael Taylor at 5:05 PM | Permalink | Comments (0) | TrackBacks (0)

5 Minutes Candlesticks NASDAQ 100

Market gapped up today on better than expected retail sales numbers... As we know, yesterday FOMC announced that they are going to leave the rate unchanged and that inflation is still up... Market reaction was muted at best.. From this we can deduce that market participants have mixed reactions about the economy ahead, bulls are not really in control, neither are bears.. This is what I call a tepid market environment. When market gaps up on better than retail sales in a tepid market environment, logically we should expect it to close the gap..

This is all logical deduction, but we dont base our trading judgement solely on that. We will confirm it with the price action and our indicators... Even from the opening, price showed weakness and a tendency to close the gap... I shorted 1 contract at 1811 to test the market.... A few minutes later, MACD and Stochastics turned down... this gave me further conviction to short another 2 contracts at 1809... And I was prepared to exit if it closes the gap and bounces up.. At 10:10, the gap is closed,, but price still seems weak enough to go futher down... I didn't exit yet... at 10:35 a.m. I finally exited at 1780 when I saw a premature sign of reversal..... profits of $760.

From Briefing.com:
The data today support the idea that economic growth will be moderate. November retail sales were up 1.1%. Ex-autos the gain was 1.0% and ex autos and gasoline, it was up 0.9%. The data represent solid underlying growth. It is just one month of data, but there is no sign that the substantial weakness in housing is having much impact on consumer spending. That great fear of the recession-worriers got no support today.

Posted by Michael Taylor at 4:32 PM | Permalink | Comments (0) | TrackBacks (0)

5 minutes Nasdaq Emini CandleStick Chart

Hi,

How's it going? I hope you captured this trade. This is a god send! Even from a fundamentals perspective, market sentiments are good. Better than expected payroll numbers is definitely good for stocks in a time when we are worried about a soft landing... You can read more about the fundamentals below:

Do note that, no matter how good the fundamentals, it will not affect my decision to enter or exit a trade. Fundamentals are good only for gauging the overall market sentiments... it is not a parameter for trading....

For today's trade, you can see that I circled a hammer candlestick in the context of a double bottom, this is good enough a signal for entry. This is a strong reversal signal.... Stochastics and MACD also further confirmed by having sharp upturns...

I longed 1 contract at 1775 at 10:25 and another 2 contracts at 10:50 at 1779 when the MId-term MACD crossed its moving average further confirming the uptrend.. My profit target? Naturally it is at 1800.. this is a psychological resistance line and a strong one at that. .. At 11:30, my profit target was hit and I am out with $940 profits... You can see how price went down immediately after hitting 1800... Lesson ? --> Don't be too greedy.

Fundamental news from Briefing.com:
November payrolls increased 132,000. This was higher than the expected 100,000 gain. There was also a net upward revision of 42,000 to the two prior months. This leaves that level of payrolls 74,000 above what had been expected. The average monthly gain over the past three months is 138,000. That doesn't qualify as a boom, but it isn't exactly a recession either.

Payrolls are growing at a steady 1% to 1 1/4% annual rate. That will keep consumer spending rising at a decent clip, especially as there is also moderate wage growth.

Hourly earnings for November were up 0.2%. This is less than the expected 0.3% and follows a 0.4% October increase. The year-over-year increase is now 4.1%. This is not too hot to cause significant inflationary pressures, and not so cold as to restrain consumer spending.

Posted by Michael Taylor at 4:46 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq 100 Emini

Hi,

The market has been plunging from the morning session and its reasonable to expect either a retracement or a continuation of the downtrend in the afternoon session. After a slight pullback, at 13:55, price started to bounce off the moving averages with the short-term MACD crossing the zero line....

I shorted 1 contract at 1794.25 and another 2 contracts at 1790 when the mid-term MACD crossed its moving average ( 3rd red circle)... Price plunged even further and I exited at 1780 as I felt price has fallen too far for the day... well,, profits of $690 is enough for the day...

Posted by Michael Taylor at 5:02 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq Emini 100

Hi,

Almost all markets throughout the world went up. Is this the santa clause rally? I don't know. But I sure know that the US markets is in a state of indecisiveness. Everyone's waiting for this friday's non-farm payroll report.. Until then, I dont expect to see any big movements...

Today's play is simple,, gap closure,,, We can see that the moving averages are flat.. suggesting consolidation.. there is not really a trend here in the 5 minutes chart. but if you look at the daily chart, the uptrend is not broken yet...

I longed 1 contract at 1800 at 12:20... and another 2 contracts at 1802 at 12:45 when price crossed over the moving averages.... My target was naturally yesterday's close at 1807... Notice I have circled the upturn in stochastics... this is another evidence that price is moving up... My profit target was hit at 13:00 and I am out at $340...

Posted by Michael Taylor at 5:22 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq 100 Emini

Daily Nasdaq 100 Emini

Hi Traders,

How's it going? Everyone's expecting the uptrend to end with the slew of disappointing economic data released last week.. But, what did I tell you? Yes, the uptrend is still in tact! there is nothing from technical analysis to say that the uptrend is over. Just look at the Daily chart above.

Today's trade is relatively straight forward, there is a very obvious double bottom formed from the previous Friday.... This coupled with my MId-term MACD crossing the zero line is a very powerful signal for me to go long. I longed 1 contract at 1785.5 at 9:35 and another 2 contracts at 1792.5 at 10:15.... I was prepared to let it run.... however at 11:35 price started to weaken and I reckoned that it has ran too much over the past 2 hours... I finally got out at 1804 with $710 profits.

We are entering a precarious stage now, as everyone's expecting the uptrend to end, it might be a self-fulling prophecy... Before you jump to conclusions, read this:

From Briefing.com:
There is not yet much indication that the stock market will live up to its December reputation. The final month of the year has been the best, averaging a gain of 1.7% over the past fifty-five years, according to the Stock Trader's Almanac. The market was down last week, and stock futures point to a slightly lower open this morning.

There are no economic releases today. The big one this week is the employment release on Friday. It will also be a slow week for earnings reports and probably earnings guidance as it is just the first week of the final month of the quarter.
Market momentum has slowed and even though December has been a historically strong month, we remain cautious about the near term outlook.

As daytraders, all we have to do is react to the market, don't let uneccessary assumptions cloud your judgement in trading.

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Posted by Michael Taylor at 5:18 PM | Permalink | Comments (0) | TrackBacks (0)