Dow Down Big Time

Hey folks,

I will be back Monday with intraday comments for the week. I hope to get at least 2 weeks in of good commentary here.  See you then.

As it is now the dow is down over 250 (hopefully you caught a  lot of this move) and we are heading into lunchtime but volume has not dried up as much as it normally would at lunch so I am still keeping a close eye on things. Have a great weekend.

A Sweet Triangle

Looking at this 3 minute chart of the YM contract right around fed time today. What I want to point out is actually the setup that occurred about 30 minutes after the 2:15 info. I like to watch  how the market goes into and acts around the 3:00 EST time after the fed.  During the announcement I was looking at the bonds and noticing how they showed strength around the number. Yes they pulled down but the follow through was to the long side. SO this was the first signal of overall market sentiment. Then we saw the bulls try to push forward again around 2:45. You can see this on the chart by those green candles, but notice the long wicks showing us rejection. Thats another bearish sign. Then the market consolidates into a perfect triangle pattern. When it breaks with good volume to the downside of the triangle thats a clear signal to look at a smaller time frame and get on a pullback. So basically you get three signs confirming the move. At that point you go with it.

Notice also that the lines drawn on the chart had been drawn before the open. They are key levels from the overnight session. See how well they where respected on the move down. These would be great targets to take some profits on the move as it progressed down.

Hanging Out

What a rally we had. If you followed the last post and weighted for the TRT to pullback and then targeted the Monday POC then you should have been able to make some money. We rallied much more after that. But now we seem to be hanging and I wanted show something I have been using recent which is drawing the hourly pivots on the 3 minute chart. Take a look and you see we paused at these levels during the push up. You can see we are now stuck right a R3 on the hourly. R3 in terms of any time frame pivot is super important. It takes a lot for the market to get past R3 and S3 for that matter on any time frame pivots.

Good Morning Fed Day

A quick trade idea look at the open here and we see from this market profile chart that we opened above yesterdays HVA. Tested the LVA from Monday and had trouble getting in that area. However their is a untested POC above at 12896 so if Ym stays above the 12864 level I will take a long at an attempt to target the POC from Monday.

Some YM Numbers For 4/21/08

Some folks know I hardly use traditional indicators during my intraday trading. Typically I do with what I like to refer to as Key Levels that I identify as support and resistance. The U.S. markets open in only 6.5 hours from now so I better get some sleep. But here are some quick Key Levels for the YM (mini-dow) that I will look at during the day

12901

12857

12813

12769 – 50%

12725

12681

12637

Why these numbers? It’s really simple. 12769 is the 50% retrace of the range on last Friday’s trading. The range of the last 5 days is 177. So I divide the 177 by 4 and get the 25% number at 44. Now take that 44, add it on top of the 12769 number and we get 12813. I do the same thing from the 50% line to the downside and get 12725. Continue to stack these 44 on both sides and you get the numbers listed above. Now, will I trade at these numbers. Not exactly. I will look for these numbers to overlap with numbers I am getting through intraday price action thus confirming a key level. How to trade around them at that point is a story for another time. It’s kinda late to post it now but do the same thing here on the weekly range 50% and you will get another set of decent numbers to have in your arsenal.