I remember a Saturday Night Live skit a couple of years back where they were talking about being a Hot Mess. When I look at many charts right now, the same thought comes to me. The ES above you can see took out it's last pivot high made before the lowest low, so that is a short term trend change. It has now made a higher short term low, which should confirm the trend change. We have not as of yet taken out the high of that spike Sunday session, so it is not full speed ahead to the upside yet.
Overall to me this is just very choppy and I don't like to trade in pattern formations like this. One trend indicator I look at is the first panel under the price, which you can see confirms the down trend. This indicator is far from the grail, sometimes it changes trends right when the market bounces back when it is in a trading range. I don't give this much weight when it has the look it currently has.
I still want to short this market about 30 points higher from here on a weekly basis, on a daily basis this is just unclear to me here.
Natural Gas certainly went for a ride after I exited my short trade yesterday.
I was asked if I reversed and went long and the answer is no. One of the absolutely brutally hard things about trading is how different things look after the fact vs before hand. You can look at this chart and see a really small range bar in the vicinity of a major low. You could argue, well this is a test of the low and a volatility break out opportunity. Perhaps.
The reality for me is that no matter how this looks right now, there is absolutely nothing I have ever studied that performs even marginally well over a large number of trades, that would tell me to go long with a setup like this. If you just look at the chart I posted yesterday, which was how it looked right when I got stopped out of my short, there was no way of knowing if I had not just blown it by having a stop too close. There was nothing bullish at all about it other than it was an outside bar for the day at that time.
The trend was clearly down on all time frames, and the big money is made with the trend. I did make $1700 per contract on the short, so that was a decent trade. Certainly the really good trades make way more than that, but sometimes when you trail them down, you get taken out. It just is what it is. For anyone looking at this thinking you need to study to find a way to take advantage of days like this I will save you the time. THERE AREN'T ANY!
Even though the long would have made more than the short did if it were exited right here, ask yourself which trade was easier to see going in? Which one was easier to sleep at night with? Which one had the highest risk? Reversal trading is very alluring, but it is oh so difficult to do well. I look at new ideas every week to try and find ways of picking market turns. I am a very good idea guy, I can't come up with any. I have been looking for 20 + years. Almost all with a few exceptions, of my best trades, are in the direction of the prevailing trend in the market.
I am flat right now, my Bond and Yen trades have just rallied too much so there were no fills in any of those orders. Other than that I do not see much for today right here.
Have a nice weekend