Tuesday, October 23, 2007

Tuesday, October 23rd

Setting up the FTSE

Globetrader_58

I take a longer timeframe chart and use it to place my Fib-tool, to have indications for the open. Considering the YM move after the FTSE close

Globetrader_59

I expect a Gap-open in 15 minutes, which usually get's sold for 10 to 15 points, depending where we open and then bounces to the upside. CAC40 and Dax which are already open do not really follow that script, but seem to settle a bit above yesterdays close, so I will wait for confirmation for the bounce on the FTSE

Globetrader_60

On the CAC40 I've used the open range to setup the Fib-tool, as we opened above yesterdays range. Someone asked me in an email how to use the Fib-tool to get retracement and target levels.

The Fib-tool in Ensign is setup to give me these automatically once I apply it to my charts.
(In this article (October 11th) I posted the Fib-tool settings.)

So I just look for a reasonable High/Low swing in the contract I'm looking at and apply the Fib-tool. That's it. If during the trading day I see that a new major High or Low has been made, I might adjust the Fib-tool.

Tried a continuation long at 6540 (out BE+1), but FTSE is building a temporary Top it seems, so let's wait for the drop before the bounce

Globetrader_61

Hmm...it seems I underestimated the pain shorts feel, being just 15 points below the drop off level

Globetrader_62

Globetrader_63

Today is a strange day for me. I'm not getting into the market. Might be a bit tired. But I'm watching and trying to see something and I might actually have just seen something:

I was watching Oil for a bottom on this downmove, but wasn't commited.

Globetrader_64

See the red line (POC or highest volume for the timeperiod displayed on the chart) at 86.50.

Now on this chart the POC has changed to 86.20

Globetrader_65

and only seconds later this spike happened

Globetrader_66

What happened is easy to explain: There was selling volume meeting a lot of buying which was absorbing the selling pressure. The moment the volume surpassed the previous highest volume, the sellers seemed to accept defeat and started covering, thereby adding to the buying pressure, which then caused the spike. It looked very automatic to me, so there might be programs out there watching for that.

I myself will monitor CL in the future to see, if this pattern repeats itself. If yes it's a nice little edge when trading CL.

Long FTSE 6595.5

Globetrader_67

and stopped -28 ticks (underestimated the selling pressure for a gap fill at the US open)

Globetrader_68

Long Oil 86.12

Globetrader_69

Stopped -13

Globetrader_70

That Stop was too narrow!

Long again 86.12

Globetrader_71

Hmm, I'm trading against a downsloping EMA, stopped again

Globetrader_79

3 in a row...I'm out

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