Friday, 29 June 2012

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)

Thursday, 28 June 2012

 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";

Wednesday, 27 June 2012

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 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 during this time), market took me out within a matter of seconds for a 1.5 point loss;

Tuesday, 26 June 2012

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;


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.

Monday, 25 June 2012

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

Friday, 22 June 2012

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 whole 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...

Thursday, 21 June 2012

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)
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.

Tuesday, 19 June 2012

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?

Monday, 18 June 2012

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;

Friday, 15 June 2012

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.

Thursday, 14 June 2012

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

Posted Image

Wednesday, 13 June 2012

There were 4 signals today, although I was only able to trade two of them (I'm not able to watch the markets as much as I'd like this week).

The first came at 10:02, went long at 2538.50, market rallied a few points, moved stop to breakeven market sold off taking out my stop for a breakeven trade.  The second trade was very similar, a long at 10:54, filled at 2537.75, rallied up, stop moved to breakeven,stop taken out.

I wasn't able to trade the other two signals, one of them would have been breakeven, the other a loss of 2 points...

Monday, 11 June 2012

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;

Friday, 8 June 2012

Buy signal at 14:50, filled at 2524.25.  Although the equity futures had been sideways up to this point the dollar index had been rallying during this time, suggesting some underlying strength in the equities.  This was a decent entry, market rallied up to as far as 2539, taking out my limit order for a 10 point gain;

A couple of days ago traders started rolling from M series contracts (June expiry) to U series contracts (September expiry).  Contracts are quarterly, expiring on the third friday of each contract month.  I'm trading the M series until volume moves over to the U series.

Thursday, 7 June 2012

Yet another trade, positive this time.  Sell signal came, went short at  20:00, filled at 2552.50, got in at the right point here.  Market sold  off down to my target, closed out using a limit order for a 10 point gain.

Pleased to end the day in profit on what was quite a treacherous day.

Further trade at 19:05, went long at 2550.25, stopped out for a 2 point loss;

Couple of trades so far today;

A long at 13:43, filled at 2564, market rallied up to 2570.50, moved stop to breakeven before market sold off taking out my stop at breakeven.  Then a further long at 14:41, filled at 2565, market sold off taking out my stop for a 2 point loss.  In fact there were a further 3 buy signals according to my new strategy during Bernanke's testimony however I'd decided not to trade during that, just as well since each of them would have been losing trades.  Arguably I shouldn't have taken the last long 20 mins before Bernanke started talking...

First trade of new strategy yesterday at 20:52, a short at 2540.50, stopped out for a loss of 2 points;