PositiveDev's trading journey

[drbubb]

I'd have loved to have been trading today but couldn't due to something I call "wurk".

 

The market popped higher on the opening overnight, following the Spanish bailout then proceeded to sell off all day. What's 100 billion euros?

 

Zerohedge summarises the Spanish bailout in one image;

 

I have had days when I felt I was using a weapon like that.

Sometimes it is aimed at my foot

[Perishabull]

Buy signal at 13:23, went long at 2522.25, market sold off taking out my stop for a 2 point loss...

[Perishabull]

Long at 13:43, filled at 2540, stopped out several minutes later for a 2.25 point loss (slippage).

 

 

 

Looked a reasonable long to be taking at that point in the day (just too early) however it was quadruple witching today, creating abnormal noise and volatility...

 

 

 

Positives this week -

 

I've become intimately acquainted with Teamviewer (A brilliant app that allows you to access your desktop machine from your mobile, when you're away from home), an incredibly useful application, given my circumstances (regular readers will know what I mean here - I can trade when I shouldn't be able to).

 

Negatives this week -

 

Well I didn't make any money see.

[Perishabull]

4 shorts today, at 14:51, 15:10, 15:36 and 15:55. First three stopped out at 2 points each per trade, the latter a gain of 10 points;

 

[Perishabull]

Not a lot happening so far today, no signals to trade, not much by way of any surprises in terms of economic data, apart from perhaps the ZEW economic sentiment survey (measure of institutional sentiment). The June survey came in at -20.1 (against expectations of -5.7 and previous survey of -2.4)

 

Seemed to appear as nary a blip on the intraday chart for FTSE 100 futures;

 

 

 

 

Similar story for DAX futures (FDAX);

 

 

 

 

and EuroStoxx 50 (FESX)

 

 

 

 

This suggests there is great expectation of a big FED announcement tomorrow. A long time ago I read a story of a very successful trader who would trade market direction in anticipation of market news, he wasn't interested in the market reaction on the news, or following it, just if there was a clear direction leading into it...most probably worth bearing in mind for the future.

 

 

 

I'm off to watch the England game;

 

Will Rooney do it for Hodgeson's England?

[Perishabull]

No trades yesterday, no signals to trade, it was close to being a signal later in the day, not close enough to trade though;

 

Although directionally correct, the entry point provided was inaccurate anyway.

 

 

 

 

One trade today so far, a long at 9:19, filled at 2606.25.

 

 

 

Market rallied up to as far as 2620.50, taking out my limit order for a 10 point gain.

[Perishabull]

Well the bears sure had fun surfing today;

 

 

 

I was almost one of them, quite near the top (but lost internet connection at an inopportune time)

[Perishabull]

Interesting day today - not always for the right reasons!

 

Had an initial trade at 09:30 (that's 3:30 Chicago time), a short filled at 2557.50;

 

E-Mini NASDAQ futures;

 

I was looking for a sell off, it never came, stopped out for a 2 point loss.

 

 

 

There were 3 opportunities for trades today, that was one of them, the next came at 12:35, I wasn't watching the market at this point, I checked about 12:39 and spotted I'd just missed a buy signal. I was using my mobile to monitor for signals (as I was away from my desktop) and it can be quite challenging to monitor. A source of frustration since the signal was spot on. I've highlighted the signal on the chart below, using a green up arrow (just to left of centre of chart). A buy signal for me is when the market diverges away from my indicators (the black signal line beneath the chart, and the other separate one sectioned off below). So you can see here the market made a lower low whilst my indicators both made higher lows, that's my signal to go long. Anyway I've made it a general rule these days not to discuss signals not traded on my blog, but thought I'd highlight this one as a good illustration showing what I'm looking for when I'm trading. It can be a source of frustration to not be active watching the markets when a quality signal is produced although it's tempered somewhat by the fact that I'd rather not be surgically attached to the markets for the entire day. From the point of the new low I wait 3 minutes for the market to confirm it (by moving in concert with my indicators) then I trade it.

 

E-Mini NASDAQ futures;

 

The other reason I mention this signal is because I've actually been highlighting all signals that occur everyday on the NASDAQ and copying the charts to

 

Pesavento Patterns on the NASDAQ 100 futures

 

 

 

Green arrows denote signals that lead to a 10 point move in the right direction, black arrows denote failed signals that would result in a stopped out trade and white denote signals that would result in a breakeven. I'm also using Pesavento's patterns (Fibonacci retracements) on those, so once there is enough data there I may be able to see some patterns emerge either solely with the Pesavento Patterns or perhaps in combination with the signals my own indicators generate.

 

(This is distinct from the the green/red triangles that appear on the charts. Green triangles pointing to a part of the chart means a long orders filled, red triangles means short orders filled )

 

 

 

 

 

I had another signal at 17:28 to go long, filled at 2561.50 (latter part of chart);

 

E-Mini NASDAQ futures;

 

 

There wasn't much on the data front today, after I went long the market developed into a sideways chop, and moved 5 points in my favour so I moved my stop to breakeven then my system crashed...

 

When I restarted I saw that Multicharts seemed to have duplicated all of my existing orders in the market, so I cancelled these "duplicate" orders (or so I thought) however when the market traded above my exit point of 2671.50 the order didn't get filled.

 

I closed the trade out manually for a gain of 10 points, however my system still showed active orders in the market and I was unable to cancel them! Tried restarting Multicharts and again same issue, existing orders in the market and I wasn't able to cancel them....just prior to a weekend close.....****!

 

Well that was the first time I've had to call the emergency trade desk in Chicago for Mirus Futures (my broker) and they were excellent, confirming that I was both flat and had no orders in the market (contrary to what Multicharts was telling me).

 

My partner explained that I'm probably pushing my computer too hard, what with all the real time data I'm streaming from my broker, I often watch BBC / RT / CNBC and also have the excellent Ransquawk service giving live market news and commentary. This seems to be a bit too much for my little machine it gets hot under the collar, the fan starts going and then it...well crashes. Doesn't happen that often, just often enough for me to now be considering buying a completely new machine just for trading, much higher spec in terms of processor, memory, cores etc.

 

 

Not the most tranquil days trading...

[Perishabull]

No signals to trade today, a shame since there was a nice move lower early on....

[Perishabull]

A signal to short at 8:14, I got a better fill than I expected, filled at 2535. Used a smaller stop as a result. The market rallied a few points taking out my stop for a 1.5 point loss;

 

 

 

There was a news item on Zerohedge earlier today;

 

• GERMANY'S MERKEL SAYS EUROPE WILL NOT HAVE SHARED LIABILITY FOR DEBT AS LONG AS SHE LIVES

Various markets took a nosedive on that news but equity markets recovered shortly thereafter (15 points in 4 mins on the NASDAQ - as above)

 

Would you like to share your neighbours debts? I sure wouldn't.

[Perishabull]

Jason Goepfert of www.sentimentrader.com describes some interesting seasonal observations covering the days up until the 4th July holiday.

 

From his newsletter;

 

" Stocks are entering a fairly positive time of year here at the end of Q2 and heading into the July 4th holiday.  Since 1950 the S&P 500 was positive from the last 3 days of June to the day before the holiday 73% of the time, averaging +0.8% when trading above its 200-day moving average.  That was an average of 6 trading days, and the S&P saw a maximum decline that averaged -0.6% versus a maximum rally that averaged +1.3%.  Since 1990, it was negative during that stretch only 3 times, with one loss greater than -0.8% (in 2009 when it got hit hard the day before the holiday)."

[Peppa Pig]

If I was merkel, I would be careful throwing statements like around. You really don't want to be giving these people ideas.

[Perishabull]

If I was merkel, I would be careful throwing statements like around. You really don't want to be giving these people ideas.

 

 

If she expires anytime soon it's going to look a bit suspect....!

[Perishabull]

Economic news appeared quite mixed today, the Mortgage Bankers Association reported a 7.1% drop in mortgage applications across the last week, their press release (excerpt);

 

"WASHINGTON, D.C. (June 27, 2012) — Mortgage applications decreased 7.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending June 22, 2012. The Market Composite Index, a measure of mortgage loan application volume, decreased 7.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index also decreased 7.1 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased more than 2 percent compared with the previous week and was almost 3 percent lower than the same week one year ago.

 

"Refinance volume fell last week due largely to a fall-off in refinance applications for government loans, which had more than doubled the prior week," said Michael Fratantoni, MBA's Vice President of Research and Economics. "The large swings in activity were due to the implementation of FHA's new premiums on streamline refinances, and borrowers timing their applications to lower their premiums."

 

 

Durable Goods Orders came in at a 1.1% increase for May against consensus of 0.4%. The market liked that with an upswing in the NASDAQ futures up to 2562.50 before it retraced back to around the 2552.50 level prior to Pending Home Sales coming in at 5.9% against expectations of just 1%, a big beat. The NASDAQ reacted strongly with a swift 18 point move higher within the next quarter hour. Clearly with the difficulties in the US housing market these numbers are watched closely for any hints of a change in trend.

 

On www.forexfactory.com you can get charts of previous economic reports and see how the actual numbers contrast to the expectations;

 

Pending Homes Sales (Month on month)

 

On the above chart you can see that, by and large, where a positive number was expected, the result was a beat, with a few exceptions.

 

 

 

From the National Association of Realtors press release (excerpt);

 

 

"WASHINGTON (June 27, 2012) – Pending Home Sales bounced back in May, matching the highest level in the past two years, and are well above year-ago levels, according to the National Association of Realtors®. Both monthly and annual gains were seen in every region.

 

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 5.9 percent to 101.1 in May from 95.5 in April and is 13.3 percent above May 2011 when it was 89.2. The data reflect contracts but not closings.

 

The index also reached 101.1 in March, which is the highest level since April 2010 when buyers were rushing to beat the deadline for the home buyer tax credit.

 

Lawrence Yun, NAR chief economist, said longer term comparisons are more relevant. "The housing market is clearly superior this year compared with the past four years. The latest increase in home contract signings marks 13 consecutive months of year-over-year gains," he said. "Actual closings for existing-home sales have been notably higher since the beginning of the year and we're on track to see a 9 to 10 percent improvement in total sales for 2012."

 

The national median existing-home price is expected to rise 3.0 percent this year and another 5.7 percent in 2013."

 

 

 

 

 

I didn't get any signals to trade until a little later, at 18:54, a long, filled at 2558, better fill than when the signal was given (I was on a train at the time), market took me out within a matter of seconds for a 1.5 point loss;

 

 

 

 

 

 

[Perishabull]

No signals during the times I was watching the markets today (hence no trades).

 

Shocking stuff from Barclays - posting fraudulent Libor and Euribor rates. It does make you wonder what else is going on behind the scenes...

 

BARC down 15.5% today;

 

 

 

Jack Schwager (of the Market Wizards books) is the guest for a webinar hosted by Big Mike on Saturday (Big Mike Trading is another forum I post on). It's happening at 7pm UK time.

 

Follow the link to register for the webinar. I guess he'll be promoting his new book, "Hedge Fund Market Wizards";

 

[Perishabull]

Since Europe is now "solved" the markets ripped higher in the overnight session, and I felt the open might bring quite a bit of volatility so I chose not to trade the morning session today. At the open the NASDAQ futures swung higher, then 12 points lower before beginning a rally. There were a couple of signals, initially a long at 14:21, followed by a short at 14:35. In hindsight it was a good decision not to trade since the first signal would have been breakeven, and the second would have been stopped out for a two point loss.

 

It's unfortunate there were no signals later that would have allowed me to get on board the rally...

 

E-Mini NASDAQ futures

 

It's been a quiet week for trades, although I wasn't able to watch the markets all the time this week...

 

 

The Dollar Index was crushed in last 24 hours, causing the precious metals complex to shoot higher.

 

Dollar Index futures (Intraday);

 

 

 

Gold futures (daily)

 

 

SIlver futures (daily)

[Perishabull]

Buy signal at 08:22, I wasn't watching the markets at this time but spotted it shortly thereafter, put a limit order in at 2604.25 and it came within 0.25 of a point of getting filled. Frustrating. Market rallied 14 points thereafter...

 

 

This was partly due to trading using a mobile. At home I used to have my charts and indicators on one monitor, currency divergence chart on another monitor, and a dollar index and order entry system on another screen. Works great at home, but with the mobile switching screens takes a few seconds (switching from the NASDAQ chart to the order entry screen). Those few seconds cost me the opportunity of getting into a good trade so from today I've put the order entry system on the same screen as the chart with the indicators. It'll be much easier doing things this way.

 

 

My new set-up (on screen 1);

 

 

 

On screen 2 I have AUD/USD, EUR/USD, AUD/JPY and NASDAQ futures;

 

Here we see secondary confirmation (by way of divergence) of the heightened probability of a rally in the NASDAQ, in the lead up to 08:22;

[Perishabull]

No trades today, and the markets closed 3 hours early for the July 4th holiday tomorrow. Gold seems to be taking off lately, it's too early to say for sure but it appears to be related to the recent jump in Crude oil.

 

Might we be seeing some gold rockets soon on GEI?

[Perishabull]

4 trades today, initially a short at 8:36;

 

 

Stopped out for a 2 point loss.

 

 

 

There was a further signal to short coming up to 15:00 however I misread it, going short too early;

 

 

I then took the actual signal that occured as well, going short again, each of those got stopped out for a 2 point loss. Slightly unlucky since the market then sold off 15 points.

 

 

Then a further short at 16:22, the market sold off around 6 points;

 

...before rallying up to take me out at breakeven.

 

 

Not so good.

[Perishabull]

No trades today.

 

It's been a frustrating week, mainly because I f***ed it up. On monday, poor execution cost an opportunity loss on a decent trade, then yesterday I had a profitable set up for a trade which I fluffed up meaning a loss for the week instead of what should have been a decent profit. I've made some changes to the layout of my main screen that should prevent the same mistakes happening again.

 

I won't be using the Pesavento patterns while I trade for the moment (It proved distracting yesterday and there's no point having it on all the time since I'm only checking it on an end of day basis at the moment)

[Perishabull]

I can't say exactly when it happened but gradually over the last few years I've grown to become extremely competitive;

 

 

What is it with men my age anyway?

 

 

 

 

[Perishabull]

A couple of trades today, a long at 8:38 ( filled at 260.75) and a short at 12:09 (2604.50);

 

 

Each of them stopped out for a 2 point loss.

 

 

Previously I was having occasional issues with my laptop overheating and I think was responsible for it crashing a couple of times. I keep it on a wooden desktop and I've found out that wood is a very poor conductor of heat so the heat generated by the laptop can only escape via the surrounding air or wooden desktop.

 

However, one of the gifts that Mrs PositiveDeviant and I received for our wedding was the following;

 

A slate serving tray.

 

Now what has this got to do with my occasionally overheating laptop? Well quite a lot.

 

At 25 degrees centigrade the thermal conductivity of wood (oak) is 0.17 W/(m·K) [that's Watts per Metre Kelvin].

 

Whereas the thermal conductivity of slate is a far higher 2.01 W/(m·K), considerably higher than wood.

 

You can probably guess where this is headed....

I've unscrewed the handles and left those in the box and my laptop is now sat on a new slate base, that now acts as a heat sink for my laptop and not a serving tray for canapés.

Seems to work quite well so far.

[Perishabull]

Three trades today, a long at 08:42 (filled at 2597), stopped out for a 2 point loss, a long at 09:15 (filled at 2596), a gain of 10 points....

E-Mini NASDAQ futures

The market was rallying very strongly during that second long however trading from a mobile (my only option this week) makes it difficult to make quick adjustments.

 

 

Further trade, a short at 14:06 (filled at 2615), this was similar to the first trade in that it was directionally correct but just too early;

E-Mini NASDAQ futures

 

Stopped out for a loss of 2 points. In fact the market is now closed (around 40 points down from where I'd entered that short).

 

 

 

 

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

 

 

This next chart shows how the NASDAQ diverged away from various currencies, this is a chart is from yesterday's trade, I may comment on this later in the week, a large fake out move to the upside, corrected very quickly;

[drbubb]

I can't say exactly when it happened but gradually over the last few years I've grown to become extremely competitive;

 

Is that your running PD?

Do you go so far?

 

I used to run and cycle regularly, but the knees are "shot" now,

so it does not come so easy any more

[Perishabull]

Couple of trades today, a short at 10:27, filled at 2583.50, and a long at 13:57, filled at 2577.50, each stopped out for a 2.25 point loss;