Morning Update: 1/6/2012

10:21 pm…

The market started out negatively today moving down sharply at the opening.  The ES_F dropped from the 1270 area to 1259 where it found some support and bounced to close roughly in the 1273 area. NQ_F dropped quickly but also recovered quickly. As I write this update the ES_F has pull backed rather sharply from the 1278 area resistance established during RTH to 1267 and is now bouncing. The ES_F is still in a well defined channel. Economic news expected in the morning 5:30 AM

Several trades today GC_F, YI_F, ES_F, ZB_F…

GC_F The first trade was a small balance that formed at the extreme of a larger degree balance area. I shorted the upper extreme for an initiative trade. First attempt was stopped out on a FBO. However, re entered the trade and caught an initiative break to the down side.

YI_F was a swing balance from two weeks ago. I moved the stop over the last several days trying to lock in as much profits as possible while also giving the trade some room. We stopped out this morning with a profit of +1.50. Text book swing from a minor degree balance area.

ZB_F was initially a day trade balance extreme play mainly responsive in nature.  This was a medium allocation trade mainly because of trade location and structure. As the chop became difficult to manage I reduced size by 1

ES_F a beautiful trade indeed. Caught this trade on a balance extreme in the 1204-1206 area and was able to hold on for 19 days to sell at highs today of 1274.  A perfect example of how playing these balance can yield some great profits when being disciplined and consistent.

Currently I am holding an ES_F short balance extreme responsive in nature and ZB_F balance extreme responsive in nature. Will see if this turns into a initiative trade but for now the plan is to sell both at the  upper and lower balance extreme. The trading journal has been updated with current trading history, equity graph, and open trades. Being that it is Friday will likely make no trades and just manage the open positions I now have.

Trade Well,

Olof Thomas

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