Thursday, October 14, 2010

Trading What I See

I missed a perfectly good LONG trade in pre-market yesterday. The set-up was perfect but as in trades past, I was never comfortable in taking pre-market positions, due to the low volume, and the possibility of manipulation.

Just before I left the house at 2:50pm to run some errands, I had spotted a possible LONG at 1166.00. PRICE was rejecting a new low by giving me a Minor PPF and the longer term chart was still heading up. I decided not to take it as I would be out of the house. Unfortunately, my read was correct because when I returned, PRICE had hit a high of 1171.00 !!

And throughout the course of last night's trading session, I was also trading what I saw...However, what I saw, was not what the market wanted. My first two SHORT trades were valid, as a PRIME PPF presented itself, and with the ERG pointing down, it was the perfect SHORT trade. But alas, just like the night before, the market had other plans. In my mind, it felt very much that 1180 was the target for the ES, for the night and true enough, when I opened my charts this morning, 1180 was exceeded, but ever so slightly (PRICE has eased off from that high though).

Looking ahead at today's PRICE direction, the longer term chart with last night's activity, has turned down somewhat from over-bought territory and and is now heading down to challenge the last PRICE low oscillation. In other words, it has to head back down, to create a Higher Low, in order to head back up, to challenge last night's PRICE high of 1181.00, break it, so in order for it to head higher. Amidst this, I believe that there will be ample LONGs & SHORTs presenting itself, later tonight.

For the record, I had 3 shorts last night and all of them were losers at -0.25, -1.00 & -0.50.

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