(See Above) Today the market was trapped in a tight choppy range the entire session with very low momentum and light volume. Try as we may, the market refused to throw us a bone and we ended up experiencing our first Negative Tick traction day in nearly 6 weeks. If you traded the alerts today you most likely hit your max-draw down limit. Not a fun thing to experience first thing on a Monday, but max drawdown days happen and are just part of the game. The important thing is to respect your max draw-down levels and quit trading live for the session. Think of a max drawdown level as one giant stop-out for the entire day. You limit the loss to your capital so you can come back and trade another day. The ONLY good news about 1-2 days of tight range trading is that the market typically follows up with strong trend days.
(See Above) After yesterday’s extremely tight range day, today opened with a bang (gap up) on high volume which started off an “Accumulation Up Day” that lasted the remainder of the session. Accumulation Days the market starts off at the bottom left hand corner of your chart and ends up at the top right hand corner of your chart. Strong Accumulation days.. are like plugging the drain in the tub and turning the faucet on. The water runs all day filling the tub up.. the trick is to get in somewhere and float along higher as the water levels rise. You can see that the first 2 system alerts to get long ended up being high-traction with-trend signals that allowed us to easily capture multiple points. (Take a look at an ES 1-minute chart on those two alerts and you will see how the system got us in just at the perfect time to ride the first 2 big phases of the main up trend.) The final 2 trade alerts did not fare so well as the trend had lost its steam at that point and the buyers were having trouble breaking the market above 2073. The system both times tightened the stop-loss after detecting potential failure which shaved off some of the draw-down. (Only later, after lots of choppy back and forth was the market able to get above that level and run to our posted macro target of 2076) Again this underscores the sage advice of making your points early on in the session and closing up shop to lock in the gains. The first 2 trades got you to guaranteed 1 point delta targets, i.e. protected no-lose trade configurations. Notice the big difference a trend day can make in trading, in comparison to a tight congestion range day like yesterday on Monday.
(See Above) Today started off looking like what I call a “Parabolic Pump and Dump” day. The market shot out of the gate and made a strong run higher like we were going to start another Accumulation Up Day like we had on Tuesday – but if you take a look at your 30-Minute ES chart you will see that the market got turned back after 2 long range bars up. (2 Accumulation Up Days in a row can happen but are rare – we are more likely to see 2 consecutive Distribution – Down Days) – Note: You can take a look at your Daily SPY chart and you will see that we are stalled out right at a 3/4 retrace off the pivot low from May-19, i.e. A 3/4 retrace back to the Pivot High of April-20. Between 208-210 – This is why the market was somewhat frozen in a big choppy range today) Anyway, we had 2 initial alerts to get long but the market was jumpy early on a popped past the entry points before we could get a fill. As the market made a steep climb out of the open, the Momentum System detected stall zones and started issuing Counter Momentum Short Alerts.
(See Above) As we get closer to the 3-Day Memorial Weekend, (Monday is a market holiday) the market momentum is starting to wind down and fizzle out. The market opened today trying several times to break out of the morning quicksand zone which ran from 2088.00 to 2091.50 only to return back to the mid-point. Within the first hour the sellers got the upper hand and dropped us out of the zone were the Momentum System alerted us to our first short which gave us +2.75 points of positive traction. After price temporarily got sucked back into the quicksand zone, the sellers tried to run the market down again where we caught our 2nd short for +2.25 points of positive traction. Both trades got you to a guaranteed 1 point delta target, i.e. no-lose position and if you played the basic 2 contract Scalp Configuration you scored +4 easy points today before the market went limp. Price got sucked back into the morning quicksand level again, this time on low volume, and staid there for the remainder of the session. The Momentum System detected super low momentum and issued no more trade alerts.
Friday, 5-26 (No Trade Signals Issued) Pre-Memorial Day Holiday session
Weekly Summary – Performance Stats For Week Of May 23rd, 2016