Emini Day Trading Diary

5 minutes Nasdaq Emini

Today market plunged..... It opened with a gap down of more than 20 points... Ya, don't expect market to close such a big gap... My hypothesis for the day was for market to fall even further.... There will be some attempts to close the gap and when it fails... market will falls seriously down...

I waited... and price action confirmed my hypothesis... at 12:00,, price started to fall below the morning lows... and I was confortable to short 1 contract at 1799.... there wasn't much movement and an hour later, there was a pullback to the moving averages... I shorted another 2 contracts at 1798... The reason I was confident is because, the market is now overwhelmed with negative sentiments... and the upward price correction didn't seem convincing at all...

Yes, you can see that the trade was smooth sailing... all the way till 3:10 pm... when there was another pullback and I decided that I have earned enough ... profits of $2060..

Reasons for meltdown?
The selling spark came Tuesday across the globe in China, a highflying market with a speculative zeal rivaling the '90s dot-com stock gold rush. Shanghai's benchmark index plunged nearly 9% amid fears the Chinese government was moving to squash speculation in stocks.

Posted by Michael Taylor at 5:13 PM | Permalink | Comments (0) | TrackBacks (0)

5 Minutes Emini Nasdaq 100

Hi,

There are negative sentiments in the market today... Greenspan predicting a recession by the end of 2007, oil hitting above $60 and gold above $680 due to Iran...

This gives me a rough idea of where the market will be reacting in the coming session. BUT, this does not provide enough signal for me to enter or exit the market... Technical analysis is still the KEY.

Price opened with a gap up, and started to close the gap.. as you can see, I missed the first leg of this down trend... and was hoping to catch the second leg... unfortunately... price movement was very irratic thereafter... and I had to wait till 12:00...

At 12:10, I shorted 1 contract at 1837.5 after price bounced off the moving averages with the stochastics moving sharply down and short-term MACD bouncing off the zero-line... I shorted another 2 contracts at 1835 where price rested for a while.. I exited at 1825.5 with profits of $860... Notice how the stochastics and MACD moves up after I exited? ( orange circles).

Fundamentals:
When you get this far away from a recession, invariably forces build up for the next recession, and indeed we are beginning to see that sign," Greenspan said via satellite link to a business conference in Hong Kong. "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle."

"While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown," he said.

Greenspan said that while it would be "very precarious" to try to forecast that far into the future, he could not rule out the possibility of a recession late this year.

Greenspan also said he has seen no economic spillover effects from the slowdown in the U.S. housing market.

"We are now well into the contraction period and so far we have not had any major, significant spillover effects on the American economy from the contraction in housing," he said.

Posted by Michael Taylor at 5:27 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq Emini 100 Candlesticks

Hi,
I executed 2 trades today, I shorted in the morning session and went long in the afternoon session. The afternoon trade was more beautiful. I missed the second leg of the movement for the morning trade.. well,, I am just happy that I am positive at the end of the day... opportunities abound.. :p

For the 1st trade, I observed a reversal at 9:55 with the stochastics starting to turn down from the overbought region.. I figured that if I shorted here and even if the trade went against me, my loss is minimized... I shorted 1 contract at 1856.... and another 2 contracts at 1853... the trade is basically set.... I simply wait for price to close the gap...

Well, at 10:20, there was a slight rebound,, and I didn't like the price action... furthermore, the short-term MACD did not penetrate the zero line decisively... I exited at 1846 at 10:30 with $550 profits for this trade. I did not wait for the price to close the gap... technically, there is still a half point gap, left unclosed at this moment... price action after that was ugly.. there's a huge pullback before it plunged down... I did not trade this leg of the downtrend...

The afternoon was pretty slow-paced action and I did not want to enter any low probability trade... I started to look at the market again at 14:00.... My chance finally came at 15:00 when price bounced off the moving averages and started to move upwards...I longed 1 contract at 1843 and another 2 contracts at 1845.... beautiful,,... price just went up and up with minimal hiccups along the way... I exited at the end at 1853.5 with $480 profits for this trade...

TOTAL PROFITS = $1030 Now, I can go and walk my dog with a peace of mind...

Posted by Michael Taylor at 5:44 PM | Permalink | Comments (0) | TrackBacks (0)

5 minutes Nasdaq Emini 100

Hi,

Yesterday was a holiday.. President's day... so Today's effectively the first trading day of the week. Market opened with a gap down and it even plunged lower.. I made some money by shorting, playing on pure price action and momentum... (not shown in the figure above, this trade is not recommended for beginners)...

But more importantly,, the real deal came at 10:00. when price started to rebound... you can see a hammer at 10:05? yes, that was the start of the rebound... I have to wait for further confirmation before i go long.... Stochastics started to cut from oversold level of 20 and MACD also crossed the signal line... this together with the strong price action was enough for me to go long at 1822..

I longed another 2 contracts at 1825 and you can see strong support given by the moving averages.. the trade's smooth sailing after that... It closed the gap... I was cautious when it closed the gap and expected a rebound... but it busted way far beyond the gap.. I simply let my profits run...

Exit
Price action started to trouble me... no momentum and stochastics and MACD seemed to have peaked.... I exited at 1839.5... with $930 profits...
notice that stochastics turned down from level 80 and MACD crossed its signal line shortly after I exited?

Fundamentals
According to the press, it was Susan Bies who made the market moved... Well,, I didn't know that when I was entering my trade... :p
comments from outgoing Fed Governor Susan Bies, who said the country may be seeing a bottom in slumping demand for housing, alleviated some worries that the downturn will drag down the rest of the economy. Her remarks echoed those of Fed Chairman Ben Bernanke last week, who predicted that the economy will keep growing at a modest pace.

Posted by Michael Taylor at 2:28 PM | Permalink | Comments (0) | TrackBacks (0)

5 minutes chart : Emini Nasdaq 100

Hi,

Last Friday was a huge plunge and I expected the momentum to continue to today.... and as expected, the moment market opened, price plunged... I was looking for some potential reversal at around 10:00 am.. and yes, the reversal came... I instinctively knew that today's movement is not going to be smooth like last Friday's... it's going to be a ranging kind of market... If you are not comfortable trading such a market, just stay on the side-lines rather than get yourself burnt...

I missed the opening price plunge... so I had to patiently wait for the next chance... my chance came at 12:50, a classic setup --> notice how price rallied to touch the moving averages only to bounce off in the downward direction again? This is further confirmed by the downturn in stochastics... Yes, this is where I shorted 1 contract at 1789... and another 2 contracts at 1787.5 when it pulled back... direction was pretty clear it's going down.. but by not much... since I dont expect much momentum left... I exited at 1784 where a doji candlestick formed with profits of $340... well, this is not alot,, but I am still satisfied that I can extract money out of such a ranging market..

Posted by Michael Taylor at 5:25 PM | Permalink | Comments (0) | TrackBacks (0)

5 minutes Emini Nasdaq 100

Hi,

The past five days have been hugely untrending... day traders, swing traders are all expecting what would be played out today.. yes, the much awaited correction... today's price action is the major plunge in more than 2 weeks... If you captured this, it would be profitable... however, if you don't, I don't blame you... because the long term trend is still positively uptrend... shorting might not be the right thing to do long term..

But, day traders like us, have to be flexible and adapt accordingly.. reacting quickly to developing trends is esssential.. I had been expecting this correction for a long time already and it came as no surprise to me...

Notic at 12:20, price broke all my moving averages... however, I am not ready to short yet,, I want to see it break the support level at 1810 before I make a move...

Finally at 12:50, price broke approached my support level of 1810 and I looked poised to break it... I shorted 1 contract at 1810 and another 2 contracts at 1805.... the plunge is violent and if you missed it,,, you'r never going to get a 2nd chance... My profit target is at 1791.. a support level... Stop loss is at 1815.5... You can see how the risk reward ratio is almost 4 to 1 on this trade... at 14:45, my profit target is hit and I am out with $940 profits..

Posted by Michael Taylor at 6:47 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100 Candlestick

Hi,

Today wasn't an easy day.... first price opened with a gap up and I thought it was going to close the gap... but as soon as it closed the gap, it rebounded all the way up... I missed this chance... and waited throughout the afternoon...

Caution!
I want to caution novice traders here who might be tempted to short on the down turn of stochastics from the overbought region as shown in the red circle... notice that although price went down a little, there is no real trend down and price is basically just oscillating within a narrow band... The warning signal actually comes from the long-term MACD, notice that the long term MACD crosses the zero line nicely? Yes, this is a very powerful signal that the trend is up.. and if there's anything we should avoid, it's shorting in such an environment...

Chance.
Patience pays off... price started to drop from 14:30 and I was hoping that it will somehow hit the moving averages and rebounce...
14:55, finally the long waited scenario played out as I envisioned and I went long 1 contract... notice that several minutes later this is being confirmed by an upturn in the stochastics from the oversold region....
at 15:05, I longed another 2 contracts at 1813.75... I held my position until the close where I exited at 1822.75 with profits of $595.

Posted by Michael Taylor at 7:12 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq Emini 100

Hi,

How's it going lately? Yes, I know, the market's been choppy lately... we might be at a turning point.. but that's too early for me to say... long term uptrend still seems intact but significant negative divergence can be seen in the MACD.... Price opened with a gap down... but closed the gap within 15 minutes.. then things started to get interesting...

Notice the shooting star candlestick? This indicates loss of momentum and a possible reversal... I waited for a some more signs that price is going down and voila!... price confirmed my hopothesis and I shorted 1 contract at 1810.5 and another at 1809....

This trade is a smooth ride all the way down.. until I see a doji and I knew it's time to get out.... I got out at 1801.5... with profits of $480.

Posted by Michael Taylor at 1:11 PM | Permalink | Comments (0) | TrackBacks (0)