5.21.13 – 999.9 for the High!

Recap

Recap

Seems we are not ready to close above 1000 yet. 

A quiet open that immediately closed the daily/open gap and moved up to the high of the 25m open range before trimming back 50 ticks.  With POMO on deck and 2x federal reserve speakers today and not much econ data, any move outside the open range, was going to pick my closest targets and keep my stops a bit closer today.

Price action in the first 2.5 hours eventually turned it around to cut right through the open range and up to a high of 999.9. Jeez, we couldn’t tap 1000 for nostalgia? The one hour open range didn’t lead to much momentum outside of the high and low. Heikin Ashi Range tick bars kept me in focus today with only three crossovers, as the majority of action was contained to the 25m OR. On the whole, as a trend trader, not much of a powerful day. Several setups during the trading day, with only one that had any profit outside the 25m OR and 1 hour OR. Volume was average today with an 80 tick range between hi and lo.

Strange to be up at the highs as anything above is resistance but so much support down below. What makes my trading easier for me is knowing that as the market opens, my 25m range gives me a disciplined area of concentration. In the days and weeks to come, I am hoping the market can make a decision to kick this up or sell off for some profit and close those open gaps. Yes, eventually all gaps get closed. Sooner than later as the spread increases.

So hello 999.9. The market does not seem ready to handle an above close position. Contract expiration approaching.  End of the month and upcoming holiday doesn’t make for exciting trading this week (yet). 

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Notable Charts

Market Internals

Market Internals

Using the market internals to assist my entries of price action , were overall in the mid range today. The AM session primarily in the red led to mid AM/PM lift above zero and keeping below 600 AD line. Ratio was kept at 1:1 most of the day – lackluster interpretation to me meant I was going sideways for the day.

Daily Pivot/Cam Level

Daily Pivot/Cam Level

Price came down to support at Cam Level L3 and never closed under. Price action above H4 and below L3 complements momentum move. 

1 Hour Open Range

1 Hour Open Range

Used in conjunction with my 25m Open Range chart, price action was not headed lower as it found support t the bottom of the range. See notes down below on setup #1. Entry was earlier off the 25m OR and found support here at 993.9, which lined up with Cam level L3. Attempts to break above  hour open range were unsuccessful which held me back on the 25m Open range breakout. Heikin Ashi range bars also kept me from taking any trades. Market internals were choppy and sideways (isn’t that the same thing?).

25m Open Range

25m Open Range

Heikin Ashi Rnage

Heikin Ashi Range

Summary of 5 setups on the 25m OR (5m Bar) and Heikin Ashi Range/10 Tick chart. Setup #1 described below was the trade for me of the day. Setup #2 was a valid setup with EMA crossover. Several ticks could have been grabbed. As I said at the start of my post, tight stops today would have kept the margin small. Setup #2 was still inisde the 1hour open range with held me back. All other setups were the same scenario, with breakouts above the range that lacked market internal gumption and Heikin Ashi follow through. Price closed inside  hour open range for majority of the bars.

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Trade – Setup #1 – Only trade taken

Setup #1

Setup #1

Price action forms the 25m Open Range after tapping the daily pivot and Daily/Open Gap. Only trades I’m watching for are outside the range. 1 hour open range chart has not formed. Heikin Ashi crossover long. Looking for an upside breakout. Price action stalls at the CAM H3 level (top of 25m OR, fib level))

Setup #1a

Setup #1a

Price fails to breakout and Heikin bars start to go red. No trade.

Setup #1b

Setup #1b

Setup #1c

Setup #1c

Price continues to drop through the range. Early entry would have been inside the range on EMA crossover. My entry was at 995.1 on the first Heikin bar closed under the range with the 5m Bar following suit for momentum downside. 1st target was Cam level L3 (posted in trading room, line in the sand noted on twitter post).

Setup #1d

Setup #1d

Target hit. 1 hour open range set. Only way this move was to continue is if we closed below 993.6 (tweeted). 1/2 contracts off, stop to B/E.

Setup #1e

Setup #1e

Sure enough. Cam Level L3/bottom of 1 hour open range holds.Could it go back down? Sure? I would enter again if my stop was taken out if we closed below CAM L3 and 1 hour open range.

Setup #1f

Setup #1f

Stop taken out as price action taps market open and Heikin Ashi hits 25m Open Range low. Price continued to rise a bit, came back down and broke upside through the 25m Open range. 

Trading Lesson: Being patient as I tweeted on the market open to wait for the setup. 25m Open range had to be set for me to place the trade. Would I have like for price to continue down on the EMA crossover and under the range? Sure! The fact that I waited for price on the 5m bar to cross and the Heikin Bar to follow suit on the range chart, gave me a 17 tick move with a B/E stop that I was happy to walk away from. The rest of the day was nothing that lined up like my first trade. Why give it back to the market?

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