Real Time e-mini S&P Trading, plus contrarian commentary on all the markets, all the time
Monday, August 25, 2008
E-mini and S&P Update
The continuous selling activity we have seen today started from a second lower top relative to the August 11 top at 1313.50.
I think this means that the E-minis are headed for 1251 and possibly to 1240 before a big upswing can begin.
16 comments:
Anonymous
said...
Hi Carl,
I think your blog will be more successful if you post your trade ideas as you have done lately. You long term predictions does not work (crude,gold,silver and equities and stocks you have posted previously are a miss) but your trades are profitable.If not you wouldn't be paying you bills anyway.IMHO of course. Good luck and good trading to all.
Carl, it would be very instructive to review why some of the guesstimates have failed. Maybe it's nothing more than market chop. Or maybe there's a deeper message.
I very much agree with your analysis. It appears to me that the S&P is forming a bull flag pattern retracing its August 11 high to its July 15 low. I have a target for the S&P on this rally at or about the 200 day MA of 1360 (which is declining over time). The July low to August high caused an increase of approximately 115 S&P points, which is now being retraced, the next push should mirror about the same 115 S&P points suggesting a rally would begin at or about 1245, which appears to be the mid point of your range and extending to a target of 1360. 1244 also is the 62% retracement of the July to August move. I suspect a rally that starts between 1240 and 1250 can be bought and held for a few weeks, which is a rarity in this crazy market!! Let's see what happens...
Finally, thank you very much for your blog, I enjoy reading it and comparing your analysis with my own conclusions.
As I said earlier, your calls on silver and gold were great but all the focus seems to have been on the snp. In gold and silver, your views were similar to EWI. I had these positios. On stocks, I totally disagreed with you and still do. Also your trades are not long term and you end up looking as though you have no conviction. Surely if you are in the market for a 250-300 point move on the snp, you dont need to flip in and out when it moves 30 points? I am short, sold more on Friday and am still short. 1100 is my target into the end of the year. I will increase my position below 1258 and decrease it above 1301. The Fed is going to run out of money soon at the rate it is going. As Jim Rogers said, what is the Fed going to do - start repossessing cars? Catherine
one of the things i do appreciate about your blog is that you are willing to stop out or take profits when a position isn't working. this is a quality of a good trader and i think more of us would do well to heed that characteristic.
The danger with the approach of taking your position off all the time is that it is impossible for anyone to get every small move right. The big risk is that you end up with no position at all as it moves and it is very difficult to get back in again chasing the market. One the main lessons from 'Confessions of a Stock Operator' was 'Dont loose your position'. Catherine
HI CARL today we have a small 5 waves down on the spx index . so far it has lasted 15 hourly bars , the next objective in the 1255 area yet in doing so it would just be a cleaner 5 waves down . this would bring the trend to the downside for atleast one more leg down on a short term basis . my cycles call for a high sept 2 and depending on wednesdays mkt action we might be heading higher yet to a lower top into sept 2 and then down into mid sept in what i will then call point 10 to just below 1234 on the spx cash index .while i do see the more bearish case for now im holding to this veiw ive noted above .to sum this up early sept to mid sept should be a market heading down and should be a difficult mkt envirenment to be bullish .next look at the 10 day moving average on the daily trin it has yet to get above 1.40 to signal an oversold condition if it can do so as the spx breaks below 1234 into sept 16th 19th then we should have a good bullish set up in place to turn bullish into point 15 on the 60 minute chart point 3 on the dow daily chart and point 21 on the dow monthly chart and point 19 on the ndx monthly chart . there is many bullish set ups all taking place longer term but shorter term we still need to give this mkt another 3 weeks to sort it all out . good luck joe i posted my thoughts here if you wish to see http://www.tradersaffiliates.com/WEEKLY%20UPDATE.htm
Hello Carl...as I noted last week your comments increase when you get stopped out or heaven forbid you take a loss. I can always tell the amateur traders because they make 10 - 20 S&P pts seem like small potatoes. When I traded at a trading room there were guys that aimed for only 2 -4 ES pts per day but they did trade 10 - 20 contracts.As cheap as commissions are it is always best to lock in gains and protect profits or if necessary cut a loser quickly and regroup after further analysis. With a daily ATR of 14 pts on the ES one can always find an entry and a high probability trade. The only thing I wonder is why Carl doesn't short even when his analysis and market action signal a decline. 1293 appeared to be a top due to it being the level where the declining trendline from the May, June, and August highs as well as the 38% retracement from the May high to the July low as well as the 23% retracement from the 52 wk high and 52 wk low. When you have that many areas of confluence a reaction is sure to occur.
Once again I crunched the number incorrectly, my apologies. I said I needed a close today below 1266.70 for a sell signal. I was wrong. For the record, and for tomorrow, I would need a close below 1263.20 for a sell signal.
I tried to trade for 20 years taking 4-5 points! It doesnt work unless you work for an investment bank (which I used to) and can take advantage of instant news/friends/customers getting ripped off etc. It takes the exact opposite of an amateur trader to trade for big - it takes massive patience and a lot of pain. I have been short since last year (August so pre the top)and I took a 50% drawdown on a large profit during May. it was extremely painful but I stuck stick with my conviction and still do. Catherine
To the person who said that it is amateur traders who think 20 points is nothing - I run £4000 a tick in the snp - and believe me 20 points is not nothing but I dont know anyone who can judge every 20 points. In my experience trading for 5 points is at best a break-even game unless you work for an investment bank and can capture bid offer spreads/inside info/ripping off clients/ piggy backing big trades.(which I did for many years) Also in the UK on cash for difference contract or spreadbetting there is no commission and the bid/offer spread is 0.5 of a point. I have been trading professionally for 24 years. I dont consider myself an amateur and i am the one who made the comments about 20 points. Anyway today is a big day and looking at Europe open here, it doesnt exactly look like its going North. Catherine
My question is why would you have a 50% drawdown on profits? Why would you even allow that much of your profits to remain at risk. I traded on the floor of the PHLX and of the CME before becoming a trading trainer for Lind-Waldock and then starting my own trading business. The first thing we taught the traders was 1) never trade the news, 2) risk/reward is dynamic and changes with both time and price. Sounds like you were just a little too sure of your trade to allow that type of drawdown especially when you had numerous signals to close the trade...book profits...reassess...and re-enter at a higher entry if you wanted to get short. Someone tells me that they were short since last August let's me know they are a poor trader and I don't care how long they have been trading. Money management is always key and according to your own posts you have poor money management skills. But don't fret I know many traders that have been super bearish and still managed to lose money in one of the best times to be bearish in recent memory. Regardless of your entry, your time frame, or your analysis your risk/reward should always be a minimum of 1:1. A 50% drawdown is indeed an amateur move and I'm sure that everyone here including yourself would concur. If you've been trading 24 yrs you ought to know that nothing goes straight up or straight down. Luckily the old adage the trend is your friend still holds true.
16 comments:
Hi Carl,
I think your blog will be more successful if you post your trade ideas as you have done lately. You long term predictions does not work (crude,gold,silver and equities and stocks you have posted previously are a miss) but your trades are profitable.If not you wouldn't be paying you bills anyway.IMHO of course. Good luck and good trading to all.
Totaly agree... otherwise viewers will see you as flip flopper...
Carl, it would be very instructive to review why some of the guesstimates have failed. Maybe it's nothing more than market chop. Or maybe there's a deeper message.
Hi Carl,
I very much agree with your analysis. It appears to me that the S&P is forming a bull flag pattern retracing its August 11 high to its July 15 low. I have a target for the S&P on this rally at or about the 200 day MA of 1360 (which is declining over time). The July low to August high caused an increase of approximately 115 S&P points, which is now being retraced, the next push should mirror about the same 115 S&P points suggesting a rally would begin at or about 1245, which appears to be the mid point of your range and extending to a target of 1360. 1244 also is the 62% retracement of the July to August move. I suspect a rally that starts between 1240 and 1250 can be bought and held for a few weeks, which is a rarity in this crazy market!! Let's see what happens...
Finally, thank you very much for your blog, I enjoy reading it and comparing your analysis with my own conclusions.
All the best,
Paul
As I said earlier, your calls on silver and gold were great but all the focus seems to have been on the snp.
In gold and silver, your views were similar to EWI. I had these positios. On stocks, I totally disagreed with you and still do. Also your trades are not long term and you end up looking as though you have no conviction. Surely if you are in the market for a 250-300 point move on the snp, you dont need to flip in and out when it moves 30 points? I am short, sold more on Friday and am still short. 1100 is my target into the end of the year. I will increase my position below 1258 and decrease it above 1301. The Fed is going to run out of money soon at the rate it is going. As Jim Rogers said, what is the Fed going to do - start repossessing cars?
Catherine
Hello Carl,
am so grateful for your blog.
S&P Fut seem to be bottoming for today. Possibly re establish 100% position?
Katherine de Siena
I was a bit early but I thought the 1260 would be broken , take a look at OI in the 1260 calls........
for OE this could be a possible fit
cheers
Susn
Hi Carl,
A close today below 1266.70 in the September contract will give me a sell signal.
Thanks.
Kindest regards,
PM
one of the things i do appreciate about your blog is that you are willing to stop out or take profits when a position isn't working. this is a quality of a good trader and i think more of us would do well to heed that characteristic.
The danger with the approach of taking your position off all the time is that it is impossible for anyone to get every small move right. The big risk is that you end up with no position at all as it moves and it is very difficult to get back in again chasing the market. One the main lessons from 'Confessions of a Stock Operator' was 'Dont loose your position'.
Catherine
HI CARL
today we have a small 5 waves down on the spx index . so far it has lasted 15 hourly bars , the next objective in the 1255 area yet in doing so it would just be a cleaner 5 waves down . this would bring the trend to the downside for atleast one more leg down on a short term basis . my cycles call for a high sept 2 and depending on wednesdays mkt action we might be heading higher yet to a lower top into sept 2 and then down into mid sept in what i will then call point 10 to just below 1234 on the spx cash index .while i do see the more bearish case for now im holding to this veiw ive noted above .to sum this up
early sept to mid sept should be a market heading down and should be a difficult mkt envirenment to be bullish .next look at the 10 day moving average on the daily trin
it has yet to get above 1.40 to signal an oversold condition
if it can do so as the spx breaks below 1234 into sept 16th 19th
then we should have a good bullish set up in place to turn bullish
into point 15 on the 60 minute chart point 3 on the dow daily chart and point 21 on the dow monthly chart and point 19 on the ndx monthly chart . there is many bullish set ups all taking place longer term but shorter term
we still need to give this mkt another 3 weeks to sort it all out .
good luck
joe
i posted my thoughts here if you wish to see
http://www.tradersaffiliates.com/WEEKLY%20UPDATE.htm
Hello Carl...as I noted last week your comments increase when you get stopped out or heaven forbid you take a loss. I can always tell the amateur traders because they make 10 - 20 S&P pts seem like small potatoes. When I traded at a trading room there were guys that aimed for only 2 -4 ES pts per day but they did trade 10 - 20 contracts.As cheap as commissions are it is always best to lock in gains and protect profits or if necessary cut a loser quickly and regroup after further analysis. With a daily ATR of 14 pts on the ES one can always find an entry and a high probability trade. The only thing I wonder is why Carl doesn't short even when his analysis and market action signal a decline. 1293 appeared to be a top due to it being the level where the declining trendline from the May, June, and August highs as well as the 38% retracement from the May high to the July low as well as the 23% retracement from the 52 wk high and 52 wk low. When you have that many areas of confluence a reaction is sure to occur.
Hi Carl,
Once again I crunched the number incorrectly, my apologies. I said I needed a close today below 1266.70 for a sell signal. I was wrong. For the record, and for tomorrow, I would need a close below 1263.20 for a sell signal.
Thanks.
Kindest regards,
PM
I tried to trade for 20 years taking 4-5 points! It doesnt work unless you work for an investment bank (which I used to) and can take advantage of instant news/friends/customers getting ripped off etc.
It takes the exact opposite of an amateur trader to trade for big - it takes massive patience and a lot of pain. I have been short since last year (August so pre the top)and I took a 50% drawdown on a large profit during May. it was extremely painful but I stuck stick with my conviction and still do. Catherine
To the person who said that it is amateur traders who think 20 points is nothing - I run £4000 a tick in the snp - and believe me 20 points is not nothing but I dont know anyone who can judge every 20 points. In my experience trading for 5 points is at best a break-even game unless you work for an investment bank and can capture bid offer spreads/inside info/ripping off clients/ piggy backing big trades.(which I did for many years)
Also in the UK on cash for difference contract or spreadbetting there is no commission and the bid/offer spread is 0.5 of a point. I have been trading professionally for 24 years. I dont consider myself an amateur and i am the one who made the comments about 20 points.
Anyway today is a big day and looking at Europe open here, it doesnt exactly look like its going North.
Catherine
My question is why would you have a 50% drawdown on profits? Why would you even allow that much of your profits to remain at risk. I traded on the floor of the PHLX and of the CME before becoming a trading trainer for Lind-Waldock and then starting my own trading business. The first thing we taught the traders was 1) never trade the news, 2) risk/reward is dynamic and changes with both time and price. Sounds like you were just a little too sure of your trade to allow that type of drawdown especially when you had numerous signals to close the trade...book profits...reassess...and re-enter at a higher entry if you wanted to get short. Someone tells me that they were short since last August let's me know they are a poor trader and I don't care how long they have been trading. Money management is always key and according to your own posts you have poor money management skills. But don't fret I know many traders that have been super bearish and still managed to lose money in one of the best times to be bearish in recent memory. Regardless of your entry, your time frame, or your analysis your risk/reward should always be a minimum of 1:1. A 50% drawdown is indeed an amateur move and I'm sure that everyone here including yourself would concur. If you've been trading 24 yrs you ought to know that nothing goes straight up or straight down. Luckily the old adage the trend is your friend still holds true.
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