T3 – Trading-The-Trend Market Recap & Outlook
The Market Big Picture
Good trading is always going back over the trading WEEK and taking a step back to see where the market is situated. This allows for a higher probability on an intraday setup knowing that overall market direction is in a particular TREND. It’s your patience and discipline that will continue to grow as a trader when you implement such tools.
Futures: Looking at the week behind…..
Trading the NQ this week and all it’s volatility was easily matched by the three other indices as well throughout the week. First week of February, low volume Monday and market action was already coming down off the rally from last week. Hey, end of the month, what else to expect. It was back into sell mode closing out open gaps left the week prior. Thursday’s price action was with no doubt the toughest of the week with price action all over the place. Ending up to be an inside day. The premise I had as I closed out the trading room on Thursday is that Friday should be a good day either way and with the Technical Bias that we may go down. Sure enough, best day of the week on Friday.
With all it’s volatility this week, I had the best week ever on the NQ as implementing a modification of how far how I would let 2 contracts run before taking 1 off and using the 50/144ema to keep me in TREND. I also added a 10 or 13ema to the study to pullbacks to see if the momentum was still in TREND. The use of the fib projection and 96% projection levels have been a welcome to the room as 4/5 days this week (TF 5/5 days) the levels were hit. Another added dynamic to let ALL contracts run until those levels.
Crude futures moving sideways this last week pushing both extremes after fading off the 61.8% fib retracement has yet to find its way back upside to close out open gaps. Continued calls for price to come down as low as $7 by Deutsche bank! The end of January had price regaining some traction upside but quickly fell back into the downward demise. The technical bias remains BEARISH on ALL time frames.
This of course goes with saying that here were losses this week as well but kept to a minimum. even after a loss, maintaining composure and not revenge trading to wait for the next setup and knowing when to call it quits like on Thursday. I am not the typical trader that wants to get in/out everyday. Patience and Discipline for the setup on the momentum move that has the highest probability. Not 100%, just a good chance.
Equities: Market Cap Leaders
Starting Next week
Utilizing the same T3 strategy for futures, I will look at the top 6 Market Cap Leaders and assess current market TREND opportunities for NFLX, FB, AMZN, GOOG, AAPL and SBUX. Whether you trade the options, swing or intraday position, the big picture will allow you to assess potential greater probability entries based on market momentum.
As a follower of @Jasonkelly for some long term strategies, I will begin in March every month to review some of the holdings that can be easily managed 4 times per year without concerning yourself over the intraday volatility of the market.
Looking at the week ahead…..
Futures indices now fading back downside, in tow with the equities or vice versa as you see who leads who, is now back in a confirmed BEARISH TREND. Building value and point of control at Fridays lows, with a bearish stance going into Superbowl Sunday’s open, it will take the overnight session to move us back upside on the Globex charts (50-100 tick and 4 hour T3 moving averages) to regain some Bullish positioning. Bullish momentum will continue once we break the 4 hour chart on a 50/144ema which we gave up this last week. Once we break that 144ema upside, open gaps above will be the short term targets for the market.
For the long term pic, markets clearly remain in a downtrend. Short term pic has now in a bearish position on the 4 hour charts. We continue to close out previous days open gaps below with numerous open points of control on the NQ volume profile above the rest of the indices. Crude now under the 50ema which can easily turn on a dime with news that production will be cut.
As stated last week, by no means does this indicate that the market may not pop back up as well. Your safest bet? Follow the momentum on any given day for the intraday setup. Longer term holdings for the upside need to wait for some confirmation on at least the 4 hour chart to regain some Bullish technical bias above the 144ema as in the futures
Until then, always ready in both directions.
Trading Room Futures Index Focus of Next Week: TF
Video Link to Trading Room member Ed C.’s “Using Levels to Project Targets”
One Simple Strategy. ANY market. ANY chart. ANY time frame.
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