I know you didn't intend for this to be a journal but it reads like one and I find the posts quite useful and interesting, I'm sure others do too.
Maybe if we change the thread title from "cunparis...." to just "Weekly S&P 500 Outlook" and then ask again nicely we'll get some participation from fellow traders? <knock, knock -- anyone home??>
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The real issue isn't the participation, it's that I'm changing my mind about the whole idea of an outlook. I think it sets up a bias and the possibility to want to be right. What if I say "I think we're going down" and then on Tuesday I see a bullish reversal pattern? I think weekly is too long of a timeframe and I don't have time to update it every day. So my idea was to forget predicting and just trade based on price.
In the beginning I had lots of breadth indicators. After extensive work and development (100+ hours) I couldn't prove they had any preditive power. One of the sources of the data was sentimentrader.com where I've been a member for over 1 year. I'm seriously considering canceling my membership. The site is great and the daily commentary is really great. But it's not making me money!
So this is why I'm thinking of just going to a journal. My trading is focusing more on daytrading anyway. The swing trades are pretty rare. And if there's not a trade setup then I don't care what the market is doing.
I hope this makes it more clear. I've been struggling with this since I started. In fact I started it because I wanted to see if this breadth data could have predictive power. So far the TRIN is the only one I've seen to consistently test positive and it's not good enough to be stand alone. SO I try not to trade against it but that's about it. Actually TRIN & COT. That's it.
Finally, my swing trading style is approaching my day trading style, so it makes sense to combine the two into one.
I agree to rename this thread and I hope someone would be interested in continuing it.
PS: Mike can you rename it? I can't.
Last edited by cunparis; September 25th, 2009 at 09:00 AM.
Not much to say, the drop was expected but the speed wasn't. ES came within 1 pt of my first target. I wasn't here when it happened and it had already pulled back by the close. The volume on Friday was less than the previous days and it wasn't HVC. Buying at 1035 was expected. The question is will there be enough buyers to challenge the previous high? We already had a double top so the most likely is a double top pullback which will be an attempt to take it out but should fall short. This pullback will make an excellent point to establish or add-on short positions. How you do that depends on how you want to trade it. if you're aggressive you can take a reversal in the pullback. If you trade breakouts you will wait for 1035 to be taken out. This is a matter of personal preference.
I've been writing about the dollar. Well the dollar rallied a bit this week but the trend is still down until it takes out a swing high and makes a HH. I've heard that there is a dollar cycle that is favoring a rally. I don't have time to confirm or investigate all that but the source is credible. In fact he said the dollar would rally last week and it did.
Also, the commercials were net sellers again, this makes several weeks now. We won't know who bought on Friday and next week until next Friday. So the suspense is on. Although I suspect if commercials were buying yesterday we'd see more volume. Look at the last down climax (white bar) and the HVC afterwards. This is what I'm looking for now. So far we don't have it. Longs are coming in and they could get trapped if the pullback reverses.
Let's not get ahead of ourselves. I'm short and plan to give this a lot of room because I think there is potential that this is at least a short term top. October is generally bearish for the market and often tops are made in August & September. It's a tough decision cause it could pullback to the entry. Another choice is to take partial profits, move stop to beakeven and then look for another entry.
Hope all that makes sense. Of course it does cause there are never any comments. I'm writing for you Big Mike!
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after reading my last post I thought I'd clarify something: I wasn't going to exit my position at the target. The possibility was to take off a portion and ride the rest. But we made it down so fast there is a lot of bearish momentum. This morning in premarket we're testing support at 1035 so today should give us a clue. The best sign would be a LVPB. The worse would be another test of 1035 and then price moves up on increasing volume showing more buyers coming in.
The past few days we've seen major selling. Climax down days. All these shares being sold are being bought by someone and I'm not sure who. We hit the next target which is support around 1013. A bounce from here is to be expected. So far the downtrend is on but this could be just a correction in an uptrend. Or it could be the beginning of a downtrend. We have made a lower lower and I will remain in the trade until we fail to make a lower low and we make a higher high.
I'm going to stop updating this thread for three reasons:
- Lack of participation
- Lack of time
- I'm focusing on daytrading
I will continue to enter any low risk trades that I see on the daily chart, but I'm focusing on daytrading. September started a new approach for me for daytrading without indicators, based only on price action. So far it has been very successful. You can see some of my CL trades in the Trading CL thread and in the All You Need thread. So it makes more sense for me to allocate my capital to day trading rather than swing trading. Swing trading requires "large" stops and if I'm successful at daytrading then those risks become totally unnecessary.
Before I was trying to make thousands on my trades. Now I realize that one can make a million dollars by making just 2 pts a day on ES or the equivalent on any market (10 ticks on CL, 8 ticks on Euro, etc.) due to position sizing. So this is what I'm going to do. I'm going to make the equivalent of 8-10 ticks/day total on ES, CL, & Euro.
I may start a journal, I'm not sure. I love to share so you'll find me somewhere in these forums posting my trades.
I hope you found this thread useful and I wish you all the best of luck in your trading.
The following user says Thank You to cunparis for this post:
Hi AFei, I'm sorry you found the thread after I decided to stop. To be honest I haven't been doing a lot of swing trading, I'm focusing on day trading because it has a lot more risk and because calling the top of this bull market is a fool's game (I've been a full for many months now).
To update everyone, I stopped out of that trade on BE. I regret not having taken profit at support, at least partial profit, but I was really going for a runner.
I'm currently short and I think there is a good chance we move lower from here but the last few days have me a bit uncomfortable. We have a trading range and I happen to be short at the bottom of the trading range. Things still look bearish but I'd prefer to be short from the top of the trading range!
AFei - I have several 2 other threads going that you may find interesting: