Morning Update: 12/30/2011

Hello Traders

2:55 am…

As I write this update the ES is attempting to make new highs of 1258. After hitting support a couple of days ago the ES has bounced and is now approaching the highs set on 12/28 of 1264.  We are diffidently looking overbought here and would anticipate some sort of pullback. We will be taking it light today and will not be entering any new trades as volume is light and direction unpredictable. We took two small loses yesterday YI and DX. However, we reentered the DX short and we are now positive for the trade. We are anticpating an intiative move to the downside and will be leaving it on with our remaining ES trade for the rest of the year. Moreover, we reentered YI for a balance extreme play in which we are positive for the trade. I wish all of you a happy new year and see you in 2012!

 

Trade Well,

Olof Thomas

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Morning Update: 12/29/2011

Hello Traders:

11:33 pm…

Good evening… as I write this update the ES is retracing slightly from making highs of 1250 after an expected pullback to the 1243-1245 area. Will see if this can turn into something more or merely a “dead cat bounce”.  Essentially from 12/23 to now the Es has broken out of a minor degree balance area retraced to the upper extreme area and is now bouncing slightly.  Tomorrow’s  market can do anything, especially since another holiday weekend is coming up. This combined with the lack of liquidity will make successful trades difficult. Today was a perfect example as we took small loses on the YI and DX trade precisely due to a lack of conviction and follow through . Please enjoy the holiday and thank you again for following, please continue to check the blog and twitter for updates and trade alerts. If 1243 doesn’t hold as support on the ES next stop is 1232. If 1243 does hold look for a retest of 1264 area. Responsive trades at the extremes is the primarily game plan for now, as next week the additional volume will setup a more initiative scenario for trades.

Trade Well,

Olof Thomas

Morning Update: 12/28/2011

Hello Traders:

3:34 am…

Good morning…. Tomorrow should be a rather narrow holiday range bound market  and should be just as quite as today.  I would advise not to trade unless the setup is a high probability trade. Typically the light volume makes it difficult to see any follow through.  I wouldn’t be surprised if we saw a slow grind-up hitting the 1271, 1284 area, after which we will probably back off and hit support then only to consolidate the rest of the session.  If the ES is unable to get through current resistance at 1264 then a retest of support at 1247, 1239 is likely. We had very successful trades last week and I’m currently waiting until next week for volume to return and more constructive setups to form.  There are some divergences as the market climbs higher and I would expect somewhat of a dramatic pullback. May consider shorting into next week depending on my research this week. Thanks you again for following, please continue to check the blog and twitter for updates and trade alerts. The watch list has been updated with brackets, day trading candidates, market conditions, and much more.

Trade Well,

Olof Thomas

Morning Update: 12/27/2011

Hello Traders:

12:50 AM…

Good morning! As always, I try to preface each update with our intent as a trading site and an educational resource; Screen Trading Futures main focus and/or goal is to make you money! Discussing macro economic issues are important and can be lots of fun at times. However, because most of us are short term traders, with a finite amount of capital we feel it is futile to discuss such issues in any depth. Therefore on this site, any engagement on economic issues ( i.e. GDP, unemployment, politics, policy change,  etc.) will be limited in nature. We focus on which markets are trading in ranges (balance areas) and this affords us an opportunity to predefine our risk and do what we love to do: make a trade!

As traders return from the holiday volume should increase and the market’s direction should become clear. The ES on Friday came within 4 handles of my intraday target of 1264 (read morning update 12/23/2011), and after which, backed off of resistance and bounced off of support while consolidating for the remainder of the session. YM, NQ, TF all hit highs and exhibited the same kind of action although the NQ did close on its high. Trading the week preceding a holiday can be very tricky, as the follow through on most trades just isn’t going to be there.  However, if you were disciplined enough to catch this move at support  a few weeks ago (as we did), this proved to be a potent spot to lighten up and take some profits.

This week typically has three scenarios that can play out. First.. we grind even higher squeezing shorts and establishing new highs 1271, 1284.  Second.. we may consolidate in a balance area for the rest of week and see a move towards the beginning of the new year. Finally… we may reverse hard, as most securities are at  balance extremes with a downside ES target of 1218.25, 1195 respectively. A break of 1195 on volume 1143 is likely. A break of 1284 on volume 1330 likely.

This week’s watch list has many candidates in balance areas  and should prove to be good swing trades. Insofar as day trades, there are several candidates today that I feel offer the best risk to reward.  When scanning hourly and range charts tonight there is one thing very clear: a move in one direction is immanent.  Most commodities are set up at one balance extreme or the other and all we need is volume or a lack there of.

Please check the watch list for your support and resistance levels as well as market conditions. Follow me on twitter for trade alerts, trade lessons, and market updates. Thanks!

Trade Well,

Olof Thomas

Morning Update: 12/23/2011

Hello Traders:

11:33 pm…

Good evening… as I write this update the ES is making highs of 1257.25.  Tomorrow should be a quite market and I would advise not to trade, as typically the light volume makes it difficult to see any follow through.  I wouldn’t be surprised if we saw a slow melt-up hitting the 1264 area, after which we will probably consolidate the rest of the session.   We had a very successful trade in the ES in which we were able to lock in 40 points in a two week swing trade. ZB, 6A, and CL were also winners for us.  There are some major divergences as the market climbs higher and I would expect somewhat of a dramatic pullback. May consider shorting into next week depending on my research this weekend. Please enjoy the holiday and thank you again for following, please continue to check the blog and twitter for updates and trade alerts.

Trade Well,

Olof Thomas

Morning Update: 12/22/2011

Hello Traders:

10:21 pm…

As  the holiday weekend approaches, the volume will become smaller, and thus the likelihood of successful setups diminish dramatically. As I write this update the ES had a rather uneventful day;  it retraced gains and closed at 1238.  TF, NQ, and YM also retraced gains and all indexes are currently in a balance area awaiting tomorrow’s economic numbers. I still hold a rather bullish outlook but I do acknowledge that today’s action was not the follow through I wanted to see.  As such, we will remain disciplined and consistent while waiting for  high probability setups. Employment numbers as well as the Michigan Confidence numbers are released at 8:30 and 10:00 respectively so expect volatility and noise. Please check the data sheet for your support and resistance levels.

Trade Well,

Olof Thomas

Morning Update: 12/21/2011

Hello Traders:

10:04 pm…

Yesterday was an eventful day indeed! If you were long you were nicely rewarded for your patience and conviction during the recent pullback, as all index’s were significantly positive for the day. If you were short (or kept trying to short) you undoubtedly made some tuition payments to the University of Trading, as the market reversed hard sending a clear message.  While one day of bullishness doesn’t exactly signal a trend reversal, it does without a doubt put somewhat of a damper on the bears party. I expect the market  to move sharply higher today hitting new highs.  This market can get hit with news  from Europe  at any time. I would keep stops tight and convictions strong as weak payers will be shaken.   As most professional traders are off and not partipating in this rally,  one must be prepared for anything.

Trade well!

Olof Thomas