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Summary:So as theorized, considering most FANGS were at resistance levels prior to FED, and same with the equity indexes(including Dax hitting intermediate target/resistance) we had an initial buy spike that turned into selling. I was able to pocket nicely from ZB short due to simple TA really and intermarket forces at work. China continues to weaken and that is something key to note. Maybe we will get more selling and fear trade initially to shake people out from their longs which would be a great buying opportunity.
On a side note: CIS one of Japan's top traders tweeted out he was shorting Nikkei futures overnight. That coincided with my theory that NKD was going to fall so that gave me greater confidence on my short and worked out nicely. However when it came to a support level in which I covered, I was thinking about reversing and going long. However I didn't want to trade against a legendary trader(he later tweeted out he was planning to hold when it reached that support level) and even though I saw bullish setups form, I hesitated from loading up the gun even though knowing the larger intermarket trend was bullish for Nikkei. Low and behold I wake up and I see NKD at new highs and I see a tweet from him that he took a massive loss. That just goes to show you, you really have to be your own trader. Like Livermore once warned of us about. I guess it's similar to comparing him to Paul Tudor Jones. I would never want to trade against Paul, but this lesson taught me forever
Can you help answer these questions from other members on NexusFi?
Still see more downside in miners & gold, so need to see capitulation of selling before attempting to go long.
Intermarket trend remains in tact, although equities seem overstreched.
Oil stocks seem overstreched and currently at a sell level. Some airline stocks are at selling levels, but others are bullish. I have no idea, which market is telling the truth.
The Global Dow is currently at a very key resistance sell level area which makes me somewhat cautious on the whole bull scenario. Same with most of the indexes on the interday trading, it has been stalling at key levels and the tape on Friday was pretty bearish as there were barely any buyers.
Anyways after doing weekend analysis, I am conflicted. Technically I would be shorting at these levels on most indexes. However I know you have a higher probability of being in a winning trade by trading with the trend and against the minor trend. Intermarket trend is still saying equity strength bond bear, EXCEPT for Russell so I plan to short that vs the other indexes if the tape tells me to starting the week. CHINA remains BEAR. I believe DAX is due for a pullback.
As per other journal, CL short turned out to be spot on. Bonds peaked out from a long resistance trendline today. NKD and USD/JPY are starting to weaken. GC is almost at a level where I want to buy considering where the miners are, but we still have not seen capitulation
Naked Charts:
Global DOW: Bearish double confluence resistance level
Nikkei: Bearish double confluence resistance level
Switzerland: Has been chopping at last resistance area past few days
Russel 2000: At a very key level, looking forward to see what it does intraday/
Had one of my worst days today even though I shorted at market open by taking profits way too fast
I knew something was off with the tape when the major indexes weren't confluencing at "support levels." Yet I refused to listen to the tape although one of my rules= reading the tape >edge.
Should have used an indicator to help with exit for momentum moves.
Anyways, emotions got to me when i was chasing the downside in TF(went way lower after entry) but initially spiked up which erased all my profits from the morning, and then revenge trading took course into disastrous results. Also overtraded when ideally I should be looking for 1-4 MAX trades in a day. Albeit I deserve the loss. Plain and simple.
Hopefully I get some sense knocked into me for good this time.
Time for intermarket analysis:
We finally got out of chop on Nikkei tonight and broke down after coiling at resistance levels on both Nikkei and USD/JPY. During the same time, gold and bonds have been slowly but surely picking up. Whether this is the bottom or intermediate top in equities who knows. It helps to know CIS, one of Japan's top trader is short both yen and Nikkei futures and aligning with a resistance level I see.
So today I shorted TF at morning pop around white line area. I was expecting a lower high morning pop....but of course I should have realized there were probably shorts who were trapped who sold into the close yesterday(by thinking red support line was done). Unfortunately it made a higher high before reversing to real direction. I didn't cut my losses quickly and that cost me. I knew the level in my head where TF should not go above, but I thought to myself, oh market will probably just try to scare me out of my position..... and at least it wont make a higher high.....
I chose TF out of the rest of the majors due to intermarket analysis(leading on bear signal) being spot on so far on Russel over the other indexes.....
Anyways that trade cost me $350 on 1 contract and yes I did get out pretty near top tick before it reversed back lower.
But thankfully I learned from yesterday's mistakes and I didn't let the loss phase me. I kept my emotions in check and thanks to adding a momentum indicator in helping me to sit more patiently in a trade, I was able to end the day with a $220 profit.
Had I not made the morning mistake, I would have been up a lot more but I am just happy to end the day with a profit.
Anyways, my trading style has evolved to current edge finding levels in the market to enter, then using indicator to sit in a trade and exit after enough profit or market tells me there will be supply/demand in one area.
I need to really put into my head to cut losses quickly. I should never be having that big of a loss on one contract. IF IT BREAKS A LEVEL, WHERE IT INVALIDATES YOUR EDGE, GET OUT YOU RETART. YOU CAN ALWAYS GET BACK IN THE SAME TRADE IF MARKET AGREES WITH YOU. STOP THINKING MARKET IS OUT TO GET YOU!!!!
Nothing much has changed from prior week's analysis. Russel 2000, Nikkei, ES all are starting to show bearish(holding resistance levels) signs while China has slowly started to slip lower. However Europe indicies remain relatively bid compared to rest of the world. Bonds are starting to pick up some strength as well as Gold. Miners are looking interesting...but we will see if gold can clear a key level in this weeks trading.
Gold broke a key level yesterday. Missed CL tankage even though I saw bear setup....hesitation sigh. I lost some dough shorting Nikkei last night. Didn't think it would make a new high. With volatility making new lows and nikkei making new highs, i wont be aggressive on selling anymore. Plan for today is to just watch and trade what the market tells me to. On that note, dollar and yen is looking like a buy on morning setup.
So I just want to say I'm very happy I started this intermarket journal as it has been helping me keep tabs of what the internals are saying vs my bias. Without it, I would have been short Nasdaq based on naked charts, but intermarket has been saying to stay bullish on NQ. Same with Russel, it has been the strongest signal on the bear side and so far the divergence in the NQ and TF has been all thanks to intermarket. That being said, the only one I'm slightly puzzled is the Sp500. On a standalone RS chart, ES has bear signal but we broke that key resistance line it has been held down at for a few weeks.
I will be updating with naked chart analysis if I have some more time tonight.
On a side note, I've developed an "Edge" of mine that I found on my own study of the markets......which I have been using for quite some time from last year.
Recently I discovered that, that "Edge" is not something unique...and it actually has a name to it, and it's already been talked about in the past. So this weekend, I have been studying what former traders had to say regarding the edge. Just wanted to say I was quite shocked that it actually had a name to it, as its rarely in any textbooks. But then again, this edge wouldnt probably be working if I was the only one as then the market wouldnt react to the same levels.
