Emini Day Trading Diary

5 min Emini Nasdaq 100

Hi,

Today was a down trend day... Price gapped down and never really got to close it... you can see huge swings in stochastics and market was generally volatile... When price first broke the moving averages without closing the gap, we can tell that chances are it will continue to trend down... I did not enter because of the overall volatility and I couldn't tell where price will bounce back.. there was no good signal for entry...

At around 14:30, price touched the moving averages and rebounded downwards... At the same time stochastics turned sharply down from the overbought region... This was a good risk/reward trade in that I could place my stop loss just above the moving averages.... I shorted 1 contract at 2142 and another 2 more contracts at 2133 when price broke the low formed by the earlier session... I exited only at 2127 when stochastics turned up and price seemed to bounce back from the support line formed by the channel.. profits of $540.

Fundamentals:
Oil futures rose Thursday after the government reported larger-than-expected declines in crude and heating oil inventories.
In its weekly inventory report, the Energy Department's Energy Information Administration said oil inventories fell by 3.3 million barrels last week, more than double the 1.3 million barrel decline analysts expected. Inventories of distillates, which include heating oil and diesel fuel, fell by 2.8 million barrels, much more than the expected drop of 800,000 barrels.
"(Heating oil) stocks are just plunging," said Stephen Schork, a trader and analyst in Villanova, Pa.
Crude and heating oil supplies have declined more than expected for several weeks running, exacerbating a perception that supplies may be inadequate to meet winter demand.
Light, sweet crude for February delivery rose 65 cents to settle at $96.62 a barrel on the New York Mercantile Exchange after rising as high as $97.79. Heating oil futures for January delivery rose 3.91 cents to settle at $2.6803 a gallon.
Oil prices also rose on news of the assassination of Pakistani opposition leader Benazir Bhutto and a vow by opposition politician Nawaz Sharif to boycott parliamentary elections next month, which raised concerns about geopolitical stability. Sharif also demanded that President Pervez Musharraf resign immediately.

Posted by Michael Taylor at 5:04 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

I am back. I apologize for spending more time with my family for this christmas season than concentrating on trading and updating my site. Well, Merry Christmas to all of you!

Today's trade is not as easy as it seems.. Market gapped down and there was simply no direction during the morning session... I simple couldn't tell whether price was going to close the gap or not...

At around 12:00, Stochastics started to twitch up and price appeared to be closing the gap... but there was not enough signal for me to go long... Price could very well rebound from closing the gap...

I only longed 1 contract at 2150 when price exceeded the previous day's close with a strong white candle and I went long further 2 more contracts at 2153 when price exceeded the previous day's high..

I held my position all the way till 2160 when Stochastics and Short-term MACD made a sharp fall cutting the overbought line... I exited with profits of $480.

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

5 min Emini Nasdaq 100

Hi,

Market is trending downwards and my indicators did not manage to capture that only until mid-day at 13:00... Stochastics was turning down from the overbought region and price bounced off nicely from the moving averages.. Also, MACD turned down and cut the zero-line... All these pointed to a shorting chance.. I shorted 1 contract at 2048 and another 2 more contracts at 2044 when price broke the support line established by the lows of the morning session. I simply held my position until stochastics started to turn up again and I exited at 2035 with $620 profits.

Fundamentals:
The U.S. trade deficit declined during the third quarter to the lowest level in two years, raising hopes that the country's trade troubles could be easing.
The Commerce Department reported Monday that the current account trade deficit fell by 5.5 percent to $178.5 billion in the July-September quarter. That was a better-than-expected showing and the smallest current account imbalance since a $173.4 billion deficit in the third quarter of 2005.
The current account is the most comprehensive measure of trade because it includes not only trade in products and services but also investment flows between countries.
The current account deficit had set all-time highs for five consecutive years but has declined for two consecutive quarters, prompting economists to predict that this year will see the deficit finally start to decline.
"The combination of slower growth in U.S. demand, solid growth in overseas economies and a declining dollar has been pulling the trade deficit lower as exports have outstripped imports," said Nigel Gault, chief U.S. economist at Global Insight.

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

5 min Emini Nasdaq 100

Hi,

Market gapped down by a little today and as expected it closed the gap... I did not participate in the gap closing trade because price action was choppy and the general direction is still down... I would prefer to short rather than long...

My chance to short came at around 14:50 when price formed a mini double top... price seemed to be experiencing alot of resistance from the moving averages and I shorted 1 contract at 2086, my stop loss was at 2091, pretty tight as I was not willing to risk alot of money on this trade, basically price has to break several layers of support before going further down and we can see that downside potential was limited...

Price broke through the support formed by the opening price in a huge red candlestick... I was tempted to short another 2 more contracts but cautioned myself to the limited downside ... I decided to play safe an exited at 2075 with $220 profits.

Fundamentals:
Stocks finished a bruising week on the downside Friday after a jump in consumer inflation raised concerns about how much freedom the Federal Reserve has to continue cutting interest rates. The Dow Jones industrial average gave up more than 178 points.
Concerns emerged after the Labor Department reported its consumer price index had a bigger-than-expected jump for November, with large increases in the cost of clothing, airline tickets and prescription drugs. That raised questions about the Fed's options for priming the economy.
Policymakers this week lowered interest rates and announced a plan to align with other key central banks and offer loans to pressed lenders around the world. But while it wants to stimulate the U.S. economy and make lending easier among banks wary of faltering debt, the Fed also has to keep a watchful eye on inflation.
Robert Dye, senior economist at PNC Financial Services Group, said the economic readings this week painted a mixed picture for investors, spurring some of the market's volatility.
"If you take the stronger-than-expected economic data we saw this week in the form of retail sales and add to that the inflation data and then combine that with a somewhat ambiguous statement from the Fed, you get a picture as clear as mud," he said.
Friday's report on inflation follows a reading Thursday that showed the biggest jump in inflation at the wholesale level in 34 years.
The 0.8 percent increase in consumer prices topped the 0.6 percent rise economists had been expecting. The report also showed so-called core inflation, which excludes often-volatile food and energy prices, had its biggest increase in 10 months, rising 0.3 percent.
Dye said the Fed could be proven wise for cutting interest rates by just a quarter of a percentage point Tuesday rather than by a half point as some investors had hoped. Stocks fell sharply Tuesday after the Fed's rate decision and staged a partial rebound Wednesday after the Fed announced its liquidity plan with other central banks.
The uptick in core inflation is unnerving, Dye said, because it makes it harder for the Fed to justify further rate cuts.
Also Friday, the Federal Reserve said industrial production rebounded in November, increasing 0.3 percent after a steep 0.7 percent decline in October. The increase came in slightly ahead of Wall Street's expectations.

Posted by Michael Taylor at 6:15 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

Market gapped down and spent most of its time trying to close the gap... price action was choppy and it just didn't seem to go anywhere...

Price formed a triple bottom and stochastics formed a double bottom at around 14:00... This seems like an exellent chance for entry, but if you observed carefully, you will realize that Short-term MACD is too close to the zero line

Furthermore, there is limited upside potential since all the moving averages presented resistance to price... I decided to forgo the trade in view of the risk/reward potential of this trade..

Posted by Michael Taylor at 5:52 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

Market gapped up today and the morning session was largely non-directional... price was ranging and there didn't seem to be much activity in the market.. Price seemed to be closing the gap but everytime it comes down a little, it somehow bounces back up.. I couldn't tell where it was heading to and there were no signals for a short entry..

I had to wait all the way till 14:30 when price bounced off the moving averages with a sharp turn in stochastics down from the overbought region.. I decided to short 1 contract at 2113 which had very good risk/ reward potential. I placed my stop loss just above 2116.. Price went my way a little but movements were slowly and I started to doubt my decision of entering the market at all...

However, when price broke below the support line formed by the earlier sessions, I shorted another 2 more contracts.. This time price seemed to be closing the gap... I held my position all the way till the gap closed and went beyond... I exited at 2080 when stochastics turned up with profits of $1380.

Fundamentals:
The Federal Reserve on Wednesday announced a novel approach to injecting money into the banking system as it struggles to combat a severe credit crunch that threatens to drag the country into a recession.

The announcement helped dispel the sour mood on Wall Street, where investors had pushed the Dow Jones industrial average down by 294 points on Tuesday out of disappointment with what was seen as a timid interest rate cut. After Wednesday's announcement, stocks recouped a part of the previous day's losses.

The Fed said it would conduct two auctions next week where banks can bid for up to $40 billion in loans, money that they will have to bolster their own reserves. It marked the Fed's biggest concentrated effort to inject liquidity into the banking system since the Sept. 11, 2001, terrorist attacks.

The hope is that the extra funds will spur increased lending on the part of the banks and combat a serious credit crunch that has made loans harder to obtain for many businesses and consumers.

Posted by Michael Taylor at 5:00 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

As always, the market is usually quiet before the FED announcement of rate policy... I never trade befoere the actual announcement itself.... You can see for yourself, how the market is range-bounded in anticipation of the FED's announcement.

14:15, the magical moment! FED announced a cut of 25 basis instead of the 50 basis expected and market plunged like hell... I could not short in time and only managed to get in at 2134.. I further shorted another contract at 2120.. and held my position all the way till the end when I exited at 2088 for $2200 profits.. Such opportunities don't come eveyday and all traders should capitalize to make a killing out of it..

Fundamentals:

NEW YORK (AP) - Wall Street plunged Tuesday after the Federal Reserve lowered interest rates by a quarter point, disappointing investors who hoped the central bank would move more aggressively to help the economy overcome the credit and mortgage crisis. The Dow Jones industrial average skidded more than 290 points.

Investors had been expecting policymakers would lower rates for a third straight time, though there was debate over the size of the cut. Most economists anticipated a quarter-point reduction in the benchmark federal funds rate to 4.25 percent, but some investors were hoping for a half-point cut from the Fed's final meeting this year and their disappointment took the market sharply lower.

Wall Street had barreled higher the past two weeks, propelling the Dow up 640 points partly on rising optimism that the Fed would do all it could to prevent the economy from slipping into recession. While the Fed indicated Tuesday it was doing exactly that, the market's expectations had run well ahead of the central bank's view of the economy and what it needed.

The Fed also lowered its discount rate, the interest it charges banks for loans, by a quarter point to 4.75 percent, making it easier for banks to obtain the cash they need for year-end obligations. Fed officials signaled that further cuts are possible if a severe downturn in housing and a crisis in mortgage lending worsen, but that was not enough to assuage the market.

The central bank did note that the economy has suffered, and that likely added to Wall Street's distress. The statement accompanying the Fed's decision said "information suggests that economic growth is slowing," and deleted language from prior statements stating that risks to the economy are balanced. But the Fed stood firm on a quarter-point cut for now, saying it believed the steps it has taken "should help promote moderate growth over time."

"Time will tell if this restores enough confidence in the system. They're saying that this with the other cuts that we have done should promote growth over time. It's a telegraph that we think this is a sufficient move to alleviate the stresses on the market," said Bill Knapp, economist and chief investment strategist for MainStay Investments, a division of New York Life Investment Management.

The Dow fell 294.26, or 2.14 percent, to 13,432.77 after dropping as much as 313.29.

Broader indexes also fell. The Standard & Poor's 500 index fell 38.31, or 2.53 percent, to 1,477.65, and the Nasdaq composite index fell 66.60, or 2.45 percent, to 2,652.35.

Declining issues outpaced advancers by more than 5 to 1 on the New York Stock Exchange, where consolidated volume came to 3.97 billion shares compared with 2.81 billion shares traded Monday.

Bond prices rose sharply. The 10-year Treasury note's yield, which moves opposite the price, fell to 3.97 percent from 4.16 percent late Monday. Gold prices fell while the dollar was mixed against other major currencies.

Good Trading to all of you!
Michael Taylor


DAY TRADE EMINI S&P 500 Futures

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

Dear Readers,

I wish to inform you that I will be going for holiday for a week.... Need to relax myself after a fruitful year.. Anyway, I don't expect much market movements until 11 Dec when FOMC meets.

Good Trading to all of you!
Michael Taylor


DAY TRADE EMINI S&P 500 Futures

Posted by Michael Taylor at 6:32 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100 Chart

Hi,

Market remains volatile with lack of direction... I am more predisposed to go short given the recent turmoil in the credit crunch...

Market gapped down today and went back up to cover it, but as you can see there is heavy resistance on top and price simply couldn't go beyond that.. At the same time, price was forming a double top with stochastics forming negative divergence...

I shorted 1 contract at 2094 when price broke the moving averages... another 2 more contracts at 2089 when price broke one of my support lines.. Also, If you observed, Long-term MACD crossed the signal line shortly after the entry, this provided a very strong confirmation to the trade.. I held my position all the way till price hit the support formed by the earlier session...

I exited at 2082 when stochastic moved up and MACD crossed the signal line... profits of $520.

Posted by Michael Taylor at 5:26 PM | Permalink | Comments (0) | TrackBacks (0)