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Monday, 18 August 2014

A Day In The Life

There's not much to add to Friday morning's post here really, other than we have since had a V retracement and shaken out some weak longs, so I thought I'd do something different this morning and show you what I was doing intraday on Friday, as the pattern setup was a lovely example that I'm planning to use in a book I'm (slowly) putting together.

As I've mentioned before, I'm on the team of the Princeton Trader trading room, led by Mike Vacchi, and we primarily trade ES intraday there, though we also trade oil, gold, bonds and a few other things on a smaller scale. I've stripped down the chat from Friday's session as far as I can, though it's still longer than I was hoping for, and will show it below interspersed with charts I posted intraday to show the evolving setup over the day.

This stripped version understates the contribution of other team members in the room, but it needs to as I want to show the very nice evolving pattern setup over the day, and even this stripped down version is rather long. The people commenting are chappell_charts (myself), Mike Vacchi, eubie (Stephen Eubanks of MarketTalk with Eubie), other PT trading team members Tony Rago and Todd Robetoy, and assorted room members.

michael_vacchi (07:25:17 AM): as long as middle band holds on a closing basis, all dips are buys
michael_vacchi (08:25:48 AM): taking 1/4 of long here 58 +6
stan_n (08:50:43 AM): resistance on SPX at 65-67ish - should get tested this AM
chappell_charts (08:54:20 AM): I'm S 58 looking for AM dip
chappell_charts (09:03:25 AM): I have a 60min sell brewing. Last one died but I'm keeping an eye on it
stan_n (09:23:14 AM): options expiration possible fun and games today
todd_robetoy (09:32:06 AM): overnight has unfinished business down to 54ish. Reminder indicators not as reliable during globex
michael_vacchi (09:32:18 AM): OPG 1959
michael_vacchi (09:34:59 AM): my goal is to get this thing IDed by 1030
chappell_charts (09:39:44 AM): really nice little double top setup here for morning dip if Es can get under 56
chappell_charts (09:44:17 AM):
Any of you guys notice a possible rising wedge resistance trendline on the SPX chart I used in my post this morning?
chappell_charts (09:45:00 AM): because we hit it: http://screencast.com/t/6dygmkxtPt
chappell_charts (09:59:50 AM): Heads up on this wedge. If we were to fill the gap and keep going I have wedge support currently in the 43 area
chappell_charts (10:01:55 AM): 1min sell brewing
eubie (10:05:29 AM): <1960> looks FAILED AUCTION ALERT 1st attempt (new high that fails with any umph)
chappell_charts (10:14:33 AM): 1min sells brewing SPX and NDX
chappell_charts (10:15:35 AM): 1min sell signal – also on NDX
chappell_charts (10:16:26 AM): On a break below 56 the double top target would be 51.5
chappell_charts (10:18:04 AM): Add S 59
chappell_charts (10:18:33 AM): intraday
chappell_charts (10:20:53 AM): Let's see what bears have this morning, if anything
chappell_charts (10:41:08 AM): Bears getting going IMO
chappell_charts (10:41:19 AM): this may be unexpectedly deep
todd_robetoy (10:41:35 AM): RUMOR  Ukrainian troops destroy parts of an armed convey from Russia. Ceasefire is no longer in effect
chappell_charts (10:41:39 AM): On a break under 56 the double top target would be 51
chappell_charts (10:42:15 AM): 1min sell made target
chappell_charts (10:42:51 AM): breaking 56
todd_robetoy (10:43:13 AM): 52.75 is a biggie, didn’t mean much since hit at eod yesterday see if it will now
chappell_charts (10:44:22 AM): SPX 5min sell signal
michael_vacchi (10:46:20 AM): 52.25 free ride on long
todd_robetoy (10:46:41 AM): 47.25 unfinished from yesterday
michael_vacchi (10:46:46 AM): out
chappell_charts (10:47:14 AM): big support here
chappell_charts (10:47:45 AM): took 53 from 58
chappell_charts (10:48:29 AM): still short on 59 add
michael_vacchi (10:49:19 AM): 1961 must be the HOD or it activates some very bullish stats on my stuff
chappell_charts (10:49:22 AM): weak 1min buy signal
michael_vacchi (10:49:56 AM): if a war in Ukraine can't close below middle band then nothing can
david_k (10:50:15 AM): depends if it is real
michael_vacchi (10:51:34 AM): Headline Minefield = deals with Europe news primarily, a rumor starts regarding X (usually on Twitter), price move in one direction on the rumor, the rumor is usually made by someone with no real authority, then the rumor is denied causing price to reverse violently then steadily and gets back to where price was before the initial rumor.
chappell_charts (10:51:38 AM): stop on 59 short at 58.75
todd_robetoy (10:51:47 AM): 49 unfinished now
todd_robetoy (10:51:55 AM): and still have 47.25 from yesterday
michael_vacchi (10:54:19 AM): 46 middle band
chappell_charts (10:55:42 AM): Confirmed rising wedge on SPX: http://screencast.com/t/LfZ5OMIr
todd_robetoy (10:55:59 AM): 42.75 unfinished but this is close enough, now we have 37.75
chappell_charts (10:56:03 AM): Rising wedge has broken down. This is the retracement
chappell_charts (10:58:30 AM): SPX 5min sell made target
eubie (10:59:19 AM): +16 / eubie (10:05:26 AM): <1960> looks FAILED AUCTION ALERT 1st attempt (new high that fails with any umph)
chappell_charts (11:00:09 AM): weak 1min buy died
chappell_charts (11:00:30 AM): may well get a decent bounce here but most likely will go a bit lower
todd_robetoy (11:00:39 AM): crap unfinished up to 51.50 now as well as 37.25 pick one
chappell_charts (11:08:04 AM): if we are really in luck we retest lows & get buy signals brewing
paul_b (11:09:02 AM): amazing room
chappell_charts (11:09:59 AM): On a break over 49.5 the double bottom target would be 57.25 - might be overambitious
michael_vacchi (11:10:53 AM): ok getting a bounce
michael_vacchi (11:11:20 AM): bulls need a higher low vs 42.25
todd_robetoy (11:12:16 AM): here comes unfinished 51ish, still have 37.25 and my 17's 
michael_vacchi (11:12:16 AM): back over middle band
chappell_charts (11:12:53 AM): that could be it for the retrace, but rising wedge setup here says there should be more
chappell_charts (11:13:06 AM): assuming bounce then decline further
michael_vacchi (11:13:25 AM): losing middle band again is the tell on that Jack
michael_vacchi (11:15:32 AM): that was 10 coming back, amazing
chappell_charts (11:17:08 AM): took 50.75 from 59 - expecting to get a better short entry later
michael_vacchi (11:17:27 AM): the trade for another leg down is short here stop over lower level 52.50
chappell_charts (11:17:58 AM): Flat & getting some coffee
chappell_charts (11:18:34 AM): If we do go lower we'll be looking hard for the low. Once we get that I suggest everyone go long
chappell_charts (11:19:05 AM): don't have a resistance trendline until we get a confirmed high on this bounce
michael_vacchi (11:20:48 AM): bias, retest and fail
chappell_charts (11:20:52 AM): If we go lower I have the 38.2% fib retrace at 35/6 and the 50% retrace at 28/9 - the 50% retrace is a good match with the wedge turned channel support you can see pencilled in on the SPX 60min chart I posted this morning. 2nd one down on the post
chappell_charts (11:22:20 AM): If we retest lows here 1 & 5min buys should start brewing
chappell_charts (11:22:56 AM): we have an open 60min sell signal here in the background
michael_vacchi (11:25:23 AM): lost middle band
michael_vacchi (11:31:12 AM): captain obvious checking in on twitter: Ukraine and Russia fighting is not good news going into the weekend
todd_robetoy (11:31:24 AM): lol
chappell_charts (11:39:04 AM): I have an alternate bull scenario if the current low area holds. This could be a bullish underthrow before the rising wedge breaks up with a target somewhere in the 2015-20 area. Watching with great interest here
chappell_charts (11:39:43 AM): low today pretty much a perfect retest of SPX IHS neckline. It could hold
michael_vacchi (11:42:18 AM): higher low ES on multiple timeframes
michael_vacchi (11:42:29 AM): long 47
michael_vacchi (11:43:11 AM): 1944 is the risk marker
michael_vacchi (11:44:19 AM): if bulls can't bounce this then likely we make a deeper low
chappell_charts (11:46:25 AM): Updated version of the SPX 60min chart I used in my post this morning: http://screencast.com/t/MCIrckeoUcFw - We could reverse back up here, very bullish, wedge breaks up with target 2015-20 area, or continue to 38.2% or 50% fib retrace.
todd_robetoy (11:49:29 AM): come on bulls convert 46
chappell_charts (11:49:39 AM): On a retest of the lows a 5min buy would start brewing
paul_b (11:50:34 AM): news
michael_vacchi (11:50:35 AM): risk marker breached
eubie (11:52:52 AM): -992 tics @ 1942
michael_vacchi (11:53:03 AM): -1265
michael_vacchi (11:53:07 AM): -1257
michael_vacchi (11:53:13 AM): -1113
michael_vacchi (11:53:18 AM): add 41
michael_vacchi (11:53:22 AM): 44 avg
michael_vacchi (11:53:49 AM): -1233
michael_vacchi (11:53:54 AM): -1271
michael_vacchi (11:53:58 AM): 1297
michael_vacchi (11:54:00 AM): 1299
todd_robetoy (11:54:00 AM): there’s the 39.75
michael_vacchi (11:54:04 AM): 1316
michael_vacchi (11:54:09 AM): 1240
michael_vacchi (11:54:12 AM): 1232
eubie (11:54:53 AM): -1300 tics @ 1939.00 / ES
michael_vacchi (11:55:01 AM): those are ticks
michael_vacchi (11:56:13 AM): -1320
michael_vacchi (11:56:17 AM): 1308
michael_vacchi (11:56:37 AM): added 38
eubie (11:56:59 AM): -1079 tics @ 1937.75
paul_b (11:57:34 AM): getting bounce
chappell_charts (11:57:34 AM): 5min buy brewing
michael_vacchi (11:57:46 AM): -1328 low tick on that move
michael_vacchi (11:58:13 AM): 42 avg
chappell_charts (11:58:19 AM): I have a declining channel on the SPX 1min: 
chappell_charts (11:58:52 AM): that might just be wave A channel though
chappell_charts (11:59:12 AM): 5min buy trying to fix
chappell_charts (12:00:11 PM): 5min buy signal
todd_robetoy (12:00:42 PM): 32.75 next st support for me
chappell_charts (12:01:08 PM): small L 40
chappell_charts (12:01:30 PM): SPX has tested 38.2% fib retrace level
chappell_charts (12:01:44 PM): candidate low area
chappell_charts (12:04:12 PM): Minimum low expectation now satisfied. Might go lower to 50% retrace though
binu_j (12:04:31 PM): where is that at?
chappell_charts (12:05:00 PM): 7 points lower binu - so 1930 Es approx.
chappell_charts (12:05:27 PM): Bull case is solid overall IMO unless we see Tuesday IHS right shoulder lows taken out
chappell_charts (12:08:37 PM): New SPX rising channel established at this low. Bias is bullish unless that breaks
chappell_charts (12:09:56 PM): Rising channel from the high broken
michael_vacchi (12:10:00 PM): 1/3 off 44 +2, 42 stop on rest – even
chappell_charts (12:10:01 PM): Add L 43.5
todd_robetoy (12:10:32 PM): middle band here
michael_vacchi (12:10:54 PM): not going even stop just yet
michael_vacchi (12:11:07 PM): rather not get shaken out of a ripper
michael_vacchi (12:11:13 PM): if that's what this is
chappell_charts (12:20:25 PM): restested broken falling channel resistance
chappell_charts (12:24:58 PM): bulls need this to be higher low
chappell_charts (12:26:23 PM): This is the new rising channel established from the lows: http://screencast.com/t/ee8s0y3M
chappell_charts (12:27:13 PM): This is a beautiful setup to return back up. If it delivers I may well use it in the book I'm writing
michael_vacchi (12:32:25 PM): 46 prints
michael_vacchi (12:32:32 PM): 42.25 free ride stop
chappell_charts (12:35:37 PM): 5min buy nowhere near target - Es needs short term higher high
michael_vacchi (11:58:13 AM): 42 avg
michael_vacchi (12:45:23 PM): 48 prints
tony_rago (12:46:52 PM): need ES to reach for the 52
chappell_charts (12:48:12 PM): Poss IHS neckline here
chappell_charts (01:03:20 PM): testing rising support from LOD
eubie (01:04:43 PM): -903 tics @ 1943
chappell_charts (01:04:48 PM): broke rising support from LOD
chappell_charts (01:04:54 PM): poss lows retest coming
chappell_charts (01:05:45 PM): bulls need higher low here
chappell_charts (01:06:10 PM): 1min RSI at 30, may reverse back up here
chappell_charts (01:08:30 PM): 5min buy signal still not close to target
michael_vacchi (01:14:32 PM): over 4850 and converting that makes you looking for where the squeeze lives
chappell_charts (01:19:29 PM): On a break over 48 the IHS target would be 58.75
chappell_charts (01:22:49 PM): If we break back up over 48.5 we could well do a V - would need to be soonish though. Limited time offer as right shoulder can't extend too far
michael_vacchi (01:23:05 PM): V is good
chappell_charts (01:25:12 PM): we like Vs
chappell_charts (01:31:29 PM): needs over 47 very soon
michael_vacchi (01:31:31 PM): we're in free ride so rest is up to market
graham_l (01:31:53 PM): where you guys long from
michael_vacchi (01:33:11 PM): I'm 42 avg graham
chappell_charts (01:33:18 PM): I have both my longs on single tick stops. L43.5 at 43.75 stop. L 40 at 40.25 stop
michael_vacchi (01:33:30 PM): 47/41/38 and took 1/3 44 +2
michael_vacchi (01:33:36 PM): 42.25 free ride stop
chappell_charts (01:34:45 PM): Under 42.75 the double top target 35.5, but effectively retest lows target
chappell_charts (01:34:57 PM): taking too long
chappell_charts (01:35:37 PM): Needs to hold 5min mid band ideally too, that's at 44.75 & being tested hard
chappell_charts (01:37:26 PM): 43.5 long stopped at 43.75
chappell_charts (01:38:14 PM): I'm putting my second long on 42.25 stop with yours Mike
chappell_charts (01:38:24 PM): under 5min mid band
todd_robetoy (01:40:50 PM): Vpoc 45.50
eubie (01:54:03 PM): -751 tics @ 1942.50
michael_vacchi (01:56:01 PM): stopped out 42.25 +.25
michael_vacchi (01:56:44 PM): the typical uptrend scenario would be a floor at 37s
michael_vacchi (01:56:59 PM): to go with the floor at 23s that started the last move up
chappell_charts (01:57:06 PM): stopped out 42.25 for +2.25
chappell_charts (01:58:26 PM): nice declining resistance trendline from bounce high. I'll be back in when that breaks, if not before
chappell_charts (01:58:42 PM): 5min buy signal still open
michael_vacchi (01:58:50 PM): I do not want to get left at the station
chappell_charts (01:58:53 PM): might just be forming 2nd low double bottom
michael_vacchi (01:59:11 PM): ok very risky trade here
michael_vacchi (01:59:20 PM): long 43.25
chappell_charts (01:59:25 PM): not planning to get left at the station. If there's a low here, we can catch it
michael_vacchi (01:59:38 PM): room to add
chappell_charts (02:10:03 PM): testing declining resistance from bounce high
chappell_charts (02:14:11 PM): declining resistance from bounce high broken
chappell_charts (02:14:23 PM): add L 45
chappell_charts (02:15:21 PM): testing 5min mid band at 45
chappell_charts (02:21:57 PM): Possible rising megaphone on SPX 1min: http://screencast.com/t/LzxNMKYePG
michael_vacchi (02:24:13 PM): taking 1/3 47.25
todd_robetoy (02:24:14 PM): got L 45.75 late to the party
eubie (02:24:21 PM): +871 tics @ 1947
chappell_charts (02:24:34 PM): I'm adding at higher high
michael_vacchi (02:24:40 PM): filled +4
eubie (02:25:15 PM): 2HR highs in the /ES 1948
chappell_charts (02:25:22 PM): add 48.5
eubie (02:26:16 PM): +797 tics @ 1949
chappell_charts (02:26:26 PM): second time this week I have been bottom ticked out of a long that then took off like a rocket
chappell_charts (02:26:29 PM): annoying
michael_vacchi (02:30:54 PM): moment of silence for hole shorters
eubie (02:31:18 PM): +1175 tics @ 1951
chappell_charts (02:33:10 PM): nice job on the lows everyone
chappell_charts (02:33:30 PM): 5min buy getting close to target
chappell_charts (02:34:15 PM): at a poss IHS neckline
michael_vacchi (02:37:45 PM): 43.50 stop on my long
chappell_charts (02:41:31 PM): I want 53 (close) or better ideally - over SPX 50 DMA, anything over 48 fine though as SPX daily mid band there
chappell_charts (02:41:57 PM): A full V would be nice
michael_vacchi (02:42:10 PM): over 4850
chappell_charts (02:43:11 PM): 5min buy signal trying to fix at target
todd_robetoy (02:45:10 PM): Low looks strong and high borderline weak
michael_vacchi (02:48:07 PM): you guys rock every week
chappell_charts (02:48:23 PM): great team here. I'm proud to be a part of it
chappell_charts (02:48:35 PM): 5min buy made target
chappell_charts (02:48:50 PM): 1min sell brewing - has some room though
chappell_charts (02:50:16 PM): I have possible rising megaphone resistance in the 53 area
chappell_charts (02:51:22 PM): 1min sell signal NDX
chappell_charts (02:51:50 PM): 1min sell signal
chappell_charts (02:52:13 PM): took 50.25 from 48.25
chappell_charts (02:52:18 PM): leaving 45 long on
chappell_charts (02:52:29 PM): hoping to cash that in at 80
chappell_charts (02:52:54 PM): or higher
chappell_charts (02:53:04 PM): IHS target about 83 ES I think
michael_vacchi (02:57:40 PM): crazy ticks on the lows
tony_rago (03:00:06 PM): that IHS looking more solid Jack
chappell_charts (03:00:26 PM): On a break below 48.75 the double top target would be 45.75
chappell_charts (03:06:19 PM): Rising support from the low 46 area
chappell_charts (03:33:15 PM): add L 49.5
chappell_charts (03:33:22 PM): ST low may be in
chappell_charts (03:33:29 PM): poss setup to go to 58
chappell_charts (03:34:46 PM): I think that IHS from earlier may still be in play
michael_vacchi (03:36:50 PM): squeeze lives above 53
chappell_charts (03:40:43 PM): Needs to hold 48 now. On a break below 47.75 the double top target would be 43.75
chappell_charts (03:46:34 PM): Ideal close 53 or higher
david_k (03:47:09 PM): jack...you know it's going to go there
david_k (03:47:42 PM): as long as above middle band...we are heading higher
chappell_charts (03:48:24 PM): Above middle band is ok. Higher than SPX 50 DMA would be ideal
david_k (03:49:01 PM): this market does not like being below it....great example is today...bears had it where they needed it
chappell_charts (03:50:16 PM): bears have been struggling with closes in recent years
chappell_charts (03:50:24 PM): can't seal the deal
chappell_charts (03:50:46 PM): blew it as usual
chappell_charts (03:51:04 PM): there will come a time soon when that changes
chappell_charts (03:51:08 PM): but not there yet
david_k (03:51:42 PM): mv...does that mean we may not see 38 again for a while?
michael_vacchi (03:52:33 PM): I'm not passing judgment until 63 is converted
chappell_charts (03:52:48 PM): david - that was a decent looking low. If the bull scenario plays we won't be back for several weeks
chappell_charts (03:53:05 PM): but like Mike said
chappell_charts (03:53:13 PM): needs confirmation
chappell_charts (03:53:23 PM): 53 print
chappell_charts (03:53:54 PM): that 1min sell failed BTW, but I called that as likely as 48
chappell_charts (03:54:25 PM): 53 or higher ideal close
michael_vacchi (03:55:08 PM): will sell 1/3 53.25
david_k (03:56:23 PM): it continues to amaze me and how dip buyers get rewarded..time and time and time again...
david_k (03:56:59 PM): jack...you are thinking this will change in the future?
chappell_charts (03:57:48 PM): david - chances are this plunge from the late July high was just a warmup for the main event
david_k (03:58:14 PM): this is too fun....I hope not
chappell_charts (03:58:48 PM): fun is being the right side of the trade David
chappell_charts (04:00:45 PM): decent close - just under 50 DMA but well over daily mid band
david_k (04:02:39 PM): yes...thanks for the great week.....friday to friday hit it out of the park
eubie (04:04:26 PM): CASH CLOSE LOOKS 1952.00 / ~$195.82 SPY / VXX $28.85 / QLD $121.85
michael_vacchi (04:04:57 PM): took the 1/3 52.25 +9
michael_vacchi (04:05:06 PM): 1/3 left in free ride 43.50
michael_vacchi (04:05:21 PM): still lots of news risk
michael_vacchi (04:05:27 PM): so take some profits
chappell_charts (04:05:30 PM): there is news risk
chappell_charts (04:05:41 PM): otherwise I'd be leaving everything on
chappell_charts (04:06:57 PM): took 52.75 from 49.5
chappell_charts (04:07:07 PM): leaving 45 on with 45.25 stop
michael_vacchi (04:11:25 PM): Have a great weekend everybody
todd_robetoy (04:12:56 PM): have a great weekend everyone. Fun and profitable day today
david_k (04:49:17 PM): what a joke....
chappell_charts (05:21:31 PM): this joke was on the bears. Not the first time

I could have traded the day better. I took +13.25 ES on the way down, and that should have been at least ten higher. I took +7.75 on the way up, with some bad luck being bottom ticked out of my 40 long on the retrace, and left a long on from 1945 that is up +19 at the time of writing. Very nice day overall.

What's the takeaway here? Well equities needed a retrace and got one. No technical damage was done and we have a new support level at Friday's low.  Am I still looking for a retest of the SPX highs? Yes, though as with Friday morning, I'm still looking for a decent break and daily close over the SPX 50 DMA at 1957, and a break below Friday's low at 1941.50 SPX would now be a significant warning signal that the bears might be recovering control of this market.

If anyone's interesting in seeing the Princeton Trader trading room in action, free trials are available, and I have a feeling that the next two months or so may well be the most interesting trading months of this year.

For today I think a full gap fill looks like a long shot, though if we get more war rumors who can say? As long as the Friday low holds we should now have started the move that will take SPX to the IHS target at 1987 and the retest of the highs that I have been looking for since the recent lows.

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