Tuesday, May 14, 2013


ES had quite the day. ES opened at the very top of 4 day range and took zero time breaking out, making the smallest attempt at gap fill. The WHITE ZONE of 1631.50-1633.50.  The WHITE ZONE determines control; above buyers have control/below sellers.  ES quickly tested the back of the WHITE ZONE & experienced the briefest of rejections.  The back of any zone holds the highest odds for a successful trade lower.  That being said,  the gap into the top of the trading range after basing for 4 days called for a bit of caution.  A short with a tight stop right behind the overnight high carried a small risk but you had to have the discipline to cover.  The first 5 minute bar closed above the WHITE ZONE & the overnight high.  I  posted that buyers were in control & shorts were a bad idea. The set up was a bit tricky because of the of the ONH being directly over the WHITE ZONE.  The entry was on the back side test of the overnight high. 

2  If you missed that entry the next best entry was on the first zero tick reading of the day.  this is a high value entry point on trend days & each subsequent zero tick reading provided a good long entry. At approximately  8.48 am central we had our first zero tick and a fill at 1635.75 should have been very attainable.   As always i encourage scaling & leaving a trailer. If you were to leave a trailer you had a 10+ point trade available to you.  a good trade by any measure

3 ES continued up through the 1638-1640 zone.  I warned that shorting was a low odds affair on a day like today.   Buyers continued to drive right into the 1644-1646 Initial Resistance zone.  I expect sellers to materialize at Initial Resistance & responsive sellers were not able to make a significant push lower they were  able to slow the advance.  ES made one last push above 1646 before beginning a rotation down towards VPOC.  Sellers could not muster enough strength to get to VPOC & it was clear that buyers remain in control.  

4   With sellers unable to muster anything better than a 5 point rotation lower buyers had no problemm driving ES back to the highs of the day. Simply a fantastic day.  

A few take aways from today.  Being able to recognize trend days is essential.  So many traders that are use to fading simply get killed until they can recognize the clues. Inability to get gap fill. No meaningful negative tick readings.  Hard open drive up.  A move out of a basing range (prior 4 days) No rotations or very small rotations down.  First step is getting out of the way, second step is harnessing the power of the trend days.  Get it right and it can make your month in a single day.  get it wrong or spend all day fighting it and it can destroy your account.  So many traders come to the market with ideas of how it should work.  After years of that mental exhaustion i just accepted that I dont know. I am just not smart enough to have an edge over everyone else in thought.  I am smart enough however to sit and listen to what the market is saying .  It communicates in rotations, speed, higher highs and lower lows.  It says something when gap fill is not attained or when it is.   Listening to what the market is communicating is more valuable than what I do or dont think is possible because at the end of the day I have no idea whats possible. I know that I dont know. Unless your really really really smart, you dont know either.  

So many top callers and day traders who insist this is out of control have blown up or not made any money.  Its been so easy to make money long.  No one wants to say it, its almost wrong.  I am not thumping my chest as if I know everything, I dont.  But the set ups and rotations have favored long positions for a while now.  You gain nothing as a day trader standing on principal.  No one pays you to have an opinion.  your job is to find an edge and exploit it.  That is what i try to do every day.  Its what you should try to do if your day trading.  I dont give a damm where the market will be next week.  1500 is as good as 1800 to me.  there is going to be an open, a few rotations up and a few rotations down.  I hope to collect a few dollars inbetween.  Thats what matters if your a day trader.  Sorry if I went on a bit.  Its late. And with that I hope everyone had a wonderful day & a good night.  Dont forget to tell your family you love them no matter what kind of day you had.  Thats your greatest asset period.

“Life is a series of natural and spontaneous changes. Don't resist them; that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like.” 
― Lao Tzu

Notice: This Blog & its contents are intended to be for educational purposes only & not to be construed as trading recommendations  in any way.  You should not follow anyone blindly.  Trading Futures & Options on Futures involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions are subject to change at any time.

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