Tuesday, September 28, 2010

Sample post from CarlFutiaRealTime

Some of you wanted to see samples from my trading seminar. Here is yesterday's last post of the day on CarlFutiaRealTime.

This five minute bar chart (for Monday, September 27) of the e-minis will help you see why I bagged my long position. Remember that in my last post I said that I wanted to see a close in the upper half of today's day session range (solid red line) and above Friday's close at 1143.00.

The dash red line is at 1142.50, below Friday's close and the neckline of a mini head-and-shoulders formation (although I don't put much emphasis on chart formations per se - they are just well defined trading ranges for me).

I sold my long unit when I saw the ES break out below 1142.50 on a noticeable expansion of volume (red arrows). This suggested to me that the market was not going to put in a positive close. Worse, I was worried that today's day session high would turn out to be a lower top relative to last night's high at 1149.75. If so the downside would be the 1125-30 range.

One reason I wasn't willing to be too patient with this market is that for most of Friday's and today's day session it has traded in an unusually narrow 6 point range, right at the top of a rally. This is not normal behavior for a strong market and when abnormal behavior emerges I become much more sensitive to warning signs I might otherwise ignore.

Run fast or not at all!

I am still looking for 1175 but it looks like a second 25 point drop is developing first.

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