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Thursday, June 14, 2012

MY STATE OF THE UNION




Here is the update on the Natural Gas trade. You can see my trailing stop had been pulled down really close today, and it was picked off when the outside bar formed. I was trying to exit this in the vicinity of the low point on the chart. Some may think I had the stop too tight and perhaps I did. However, once I get a good profit going like this, I really try to trap the market and squeeze it into the exit. When I saw the inside bar form, those often can be the beginning of sideways action or a reversal, so I tightened up and got picked off. I love trades like this and I find that most of the good trades I do are like this, they just go right from the entry and don't see saw or chop around. The best trades typically work immediately.

I had mentioned Cattle recently, and it broke to the downside yesterday. Anyone who shorted that did well. I also mentioned the Yen, I do have orders there to short that market but it does not appear they are going to be filled today.




I have my resting orders displayed here, and unless we get a huge stock rally, I doubt the Yen will move this much during the US session. The big currency moves are typically overnight. In any event I will continue looking for sells in this market for the next few days. Readers may have noticed I have not been discussing COT stuff much lately. I go through phases with that data between thinking it is of no value, and thinking it is really important. I am in one of the former phases right now. As a short term trader the reality is that fundamentals don't typically have a big impact. I do like to be aware of unique situations with the positioning of the big money, but often the moves can take months to happen in sync with that positioning. I do not find direct correlations to good trades I make and COT stuff during the times I study that relationship. I am also so skeptical of how the government might be messing with the numbers now on everything, that I see no reason why they wouldn't be doing it here also. They are burying what the Fed is doing somewhere, and there is no real way of knowing where.

I have a new short term trading model I am working on for the ES that is quite promising so far. It indicates a short position should be on from 1323. In this new approach I am entering in price zones at the market and not above or below highs or lows. I think the highs and lows in this market are not reliable entry points most of the time now. This is due to what the government is doing to intervene on almost a 5 minute chart basis.

I also think it is time to look at shorting Bonds now. I do have some orders in today to do so but they are under the market and I doubt we are going to go down to where they are resting. The last chart of the day is a pic of "little Vinny." These folks to the right are with the local rescue group here in San Diego, and this was a dog show this past weekend. The middle dog is a puppy who is only 4 months old. The other two on the right are two dogs that these two people just rescued. Of course on the left is the monster dog Vinny. Although the ones on the right on under sized for Saints, they still are pretty good sized dogs if you saw them at a dog park. Just look at the size difference between them and Vinny, who is only 9 months old. Walking around this show with him was like being next to Brad Pitt. It was one interview after the next. He was the biggest dog there including a few Great Danes and an Irish Wolfhound. I sure hope he lives a long and healthy life, he is a good boy. I worry about this because he is so big. As a parent you always want a big strong son, the star football player, not a poet. However the reality is really big people or other living beings don't live as long as regular sized ones. We donate money to these people to help them, like most rescues they have a record number of dogs right now on their hands they are trying to find homes for.




May we all become the big dogs of trading.



3 comments:

Michael Tredr said...

Lot of markets starting to move now. because of my capital base, I can't take advantage of all of them. I agree that debt is definitely starting to show tradeable signs. i hope you're right on the yen - i'm short on it.

Anonymous said...

Nice post, Chris.

It seems that you keep the trade over the weekend which i think pretty dangerous. We don't know if there might be some extra-ordinary events happened during market close and the market gap up hugely next Monday? I don't want to sound scary but there might be a black swan somewhere!

Between, the SP500 is ralling for the last 2 weeks. What do you think? Is it a new bull market after a huge plunge or just another bear rally?

Have a nice weekend.

TraderJ

Chris Johnston said...

It looks like the Yen is not going to give me my sell entry since it is rallying so much now. It never broke the support levels that are containing it's up trend, so I never shorted it.

As to the ES Trader J, you have a lot of subjective stuff in there. I try not to get too carried away with thoughts like those. If I were short the ES which I am not at this point, I would just follow the rules of the trade. That would mean carrying a stop of probably about 20 points above it. If something happened over the weekend, it would just be a loss. I am still playing with this new model in the ES so I am not taking any of the trades yet. I want one filter and I am not sure I have the best one yet.

I would suggest not trying to guess about news events in trading. Nobody can guess right on them consistently. Setup your parameters, then turn off the TV and click the trades in as they come up. Some of them will lose there is no way around that.