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Update on these three trades:
Counter-trend short on LCJ9: all the little failure signals in LC finally
showed their true colors on Thursday as price reversed through the NR7ID
(3/5) and headed south closing below the trendline on the weekly. Friday's
decline was small but closed near the low. With extremely strong support in
the 6660-6670 area I'm not going to push my luck. If the area holds LC could
be a good trade on long side.
Counter-trend long on BPM9: spiked to 16420 on Thursday, well beyond my
initial objective. Although there should be a pullback and another leg up
here before any significant retracement, I held greed in check and exited
the next morning at 16335.
Trend reversal long on GCM9: Thursday's spike to 298.20 turned into an
island reversal on Friday and I'm now looking for a pullback not exceeding
the 292 area. The strength of the second leg of this rally off the January
lows, suggests that the position is worth giving some breathing room with
breakeven stop at 290.10. Eye is on the weekly continuation chart for
breakout or failure of the weekly downtrend line.
Looking around, the cocoa chart is trying to hold the 1200 area - could be
interesting. The yen might be interesting if it gets another strong pullback
without breaking the lows. Not sure I've got a handle on the grains but they
appear to be reversing into a correction which should give us some clues
regarding a bottom. Incomplete H&S top in Ru2000 could be an interesting
short on a break in the market.
We continue to stand aside from the thrashing S&P futures however we may not
have to wait too long to get a trend to the downside. Absolute favorite
markets since last fall have been Asia - an idea which is finally gaining
some overdue recognition which could lead to an explosive rally as the fast
money shifts its sights.
Earl
-----Original Message-----
From: Earl Adamy <eadamy@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Wednesday, March 10, 1999 11:51 AM
Subject: FUT hiatus from spoo (LC/GC/BP)
>After getting whip-sawed in my day trading last week as the spoo thrashed
>around, I'm having an interesting time position trading some stuff I've
>never traded before. Basically, with position trades I'm using weekly for
>trend, daily for pricing and 30-60 minute bars for entry. Unlike the spoo,
>I'll leave these on a position trades with stops on all positions - entry
>price, initial stop and initial price objective are calculated prior to
>entry and the stops.
>
>Short LC9J at 68375 with initial stop at 68975 and price objective of
65500.
>Live cattle has been in a long uptrend since December and has recently
twice
>failed to make significant new highs so its looking tired and in need of a
>correction. I'm trading the April contract because this is a short term
>counter-trend trade. Had a bit of a problem entering the trade because LC
>trades in 1/4 cent ticks but the pit accepts prices of 4 digits only so I
>missed a fill at 68425 because I should have entered it as 6842 - go
>figure! Of course the price immediately ran against me running quickly up
to
>68950 where it completed a double top and began to fall quickly. I was
>amazed that my stop just 1 tick (a whole $10) was not taken out! As I
>watched the price accelerate to upside, I was tempted to second guess my
>stop and save myself a few dollars but I decided that I'd planned the trade
>properly and should let the market take me out - turned out to be a good
>lesson in not over-managing a trade as price fell back to 68250. Hard to
>tell how this trade will turn out - I'm using half hour bars for entry and
>it needs to get moving south or I'll scratch the trade.
>
>Long GC9M at 29010 with initial stop at 28400 and initial price objective
of
>29800 with possible target around 31400. Gold has been in a long down trend
>which appears to have based out with the beginning of a modest uptrend and
>symmetrical triangles on both the daily and weekly charts. Also, the latest
>COT reports showed the commercials heavily long gold. I'm trading the June
>contract because I felt this trade could run beyond expiration of the
>current front contract. This one moved quickly off the entry and I've been
>able to adjust my stop upward twice.
>
>Long BP9M at 16096 with initial stop at 16014 and initial price objective
of
>16286. British Pound has been in a very long consolidation near highs for a
>long time, then recently broke down through trendline across this year's
>lows and has an established short term downtrend on the weekly chart. This
>is a countertrend trade to catch the retracement although the COT report
>indicated that the commercials had moved heavily long providing an edge to
>the trade. The June contract was the logical choice since March was
>expiring. The first rally off the low on the daily looked solid with a pair
>of NR7 days which caught my eye, also had noticed a very tight
consolidation
>on 30 minute chart between 16024 and 16096. I managed to diddle around
while
>entering my trade and missed getting my order in before it broke out above
>16096 and quickly ran nearly 50 points. With an 82 point stop at my
proposed
>entry, I refused to chase it. I let the order sit hoping to catch a
>retracement back to the breakout and my patience was rewarded by a fill
just
>2 ticks above the retracement low. BP has never looked back - each day has
>demonstrated strong thrust with little retracement so I am now reevaluating
>my price objective. I was able to adjust my stop upward a couple of hours
>after entry and again this morning however with such a strong performance
>I'm giving it plenty of room although I'm not forgetting that this is a
>counter trend trade.
>
>Earl
>
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