25 thoughts on “*** Buy ES NOW Targ=2750.75 Stop=2738.50 TS=eod (disc) FAQ & Disclaimers: TheHappyQuant.com

  1. Reasons NOT to like the trade: RTY doesn’t show any pattern to support it. NQ has already broken HOD & run a bit w/o a pullback. Generally, requires a little range extension. The NQ break of HOD was a lunch-time breakout.

    Reasons to like the trade: Beautiful patterns on 5 minute NQ, ES & YM. Small range for the day so far, extension likely either above or below. ES pulled back to around the open, consolidated, then moved back up. High/Tight pattern on YM. Absolute clear space above the ES dailies. Clear space above on NQ and kinda/sorta YM. It’s possible that RTY would be being pulled toward its HOD at about the time ES would be nearing its target; would help the trade. Never short a dull day.

  2. The YM tight range 24800 to 24583 – if YM breaks below that, I suspect some traders have been watching it, so might nudge the overall markets in the wrong direction. Such it is with tight ranges. Moving stop to 1 tick above the low of the 11:25 5 min bar, 2740.25.

  3. oh forgot – a lot of folks believe the first Mon of a month is a good inflow day, and generally, statistically speaking, makes for bullishness, so that’s another reason to like the trade.

  4. This is a good time to reflect on the wisdom & value of just “sitting on your hands” sometimes. No need to fret over things at the moment; there’s really nothing of note going on with the trade. It’s human nature to start worrying when nothing’s going on, but it doesn’t add any value to the trading.

  5. NQ just ticked above it’s HOD; good for the trade. And ES ticked outside the recent tight range from 12:25. All good for the trade, but not a reason to get giddy at all.

  6. The tight range on the NQ from 12:30 is a pretty obvious shelf; I’d think a lot of traders are seeing it. But when it ticked outside the range just now, there wasn’t any impulsive run. So, hard to tell if the teenie bit of NQ breaking its HOD was meaningful. I’m not stewing about it, either way, right now. It’s one trade; it’ll work, or it won’t work.

  7. Human nature being what it is, nervousness might be kicking in. For me, the reaction to getting antsy & nervous would be being tempted to move my stop. If I did that just because of fear, it’d surely have some random effect on profitability. The only potential modification to the trade that I see, that could be smart, is moving the stop just below the tight ES range, form 12:22, with a low of 45.50, which’d make the trade an inflection trade, betting on the range breakout to the upside. But, even I were to do that, I would have wanted to bump up my size to account for the smaller stop excursion.

    It’s tense in a way, and boring in a way, but I think I’ll stick with the original premise The ES pattern on the 5 minute charts looks as good as when we entered the trade. Most all the “reasons to like the trade” are still valid.

  8. On this trade, end-of-day, for me, is 4:00 US East Coast time, which is about an hour from now. The trade is still looking good, but I might do a little tightening of the target & stop, not because anything structural about the trade has changed, but just because we don’t have as much time left in the trading day.

  9. Things are still interesting, from the perspecive of the tight range. The ES is at 47.25, the high of that tight range is 47.75. For the NQ, breaking that high of its tight range would mean a new HOD. Pulling stop up to 41.25. Nothing special about that number.

  10. Leaving original target in place. The original premise of the trade is still good. At the time of entry, we’d just broken the 11:105 HOD on the ES, with a teensie pullback to our entry. At that time, the NQ had also broken it’s 11:05 HOD, and the price action from then was beautiful

    Now, at this point, the ES pattern makes one think that a break of 47.75 might create a pop to the ES HOD – and even a small pierce of the ES HOD will get us to our target. The RTY, conceivably, could be breaking its HOD at about the same time & provide a nudge if stops are getting hit then. The NQ 5 minute chart is still a beautiful thing. TM, however, isn’t likely to help the trade.

    Having said all that, there are a limited number of minutes left till we get to our time stop. So, there might be an off-the-cuff decision or two shortly.

  11. Oh, also – there’s a chance some short squeeze type action would play out today. I’ll look around 3:45 for that. Would be very helpful for our trade.

  12. If things roll over at the end of the day, after a day like today, I think, they tend to roll over hard & fast. I’m not predicting that, but if my own personal belief is that, if there WERE to be a rollover, it’d happen that way, I can place a stop appropriately. 34 minutes left till time stop.

  13. Russell seems to be being drawn to it’s HOD. I’m sure there’s stop above it’s HOD, too. Only minutes left to see what’ll happen, but it’s possible we’ll get some nudge from RTY. Stop to 43.75.

  14. Given the pattern on the ES and NQ and YM, every single person who came in short at the open, betting on a gap fill to the prior day’s HOD (or close or VWAP) had exactly zero opportunities to exit with a normal-sized profit. The ranges so far today aren’t very big, so they’re also a chance that a lot of those same shorts are not stopped out yet. The ES moved up 7 points from the open, so gap traders who can trade with a stop of more than 7 points, generally, are still in the trade.

Comments are closed.