Changes For ST Trading

Nice overnight rally! Again, without me. It seems I have a problem with the exits for my Short Term Trading. Recently I anticipated well the short term variations but the market kept kicking me out before the bigger moves. The noise is bigger as the time frames become smaller.

I introduced my ST Trading strategy here, about two months ago. Until I have a longer track of positive performance with this strategy, I will stop posting the trades on the blog. I will still post the Intermediary Term trades, my main focus, for which the short term volatility is not as significant and with which I have achieved decent performance over the years.

Back to the markets, the path I anticipated seems to be very accurate. The market is up significantly as I am writing this and I expect it to reach at least the recent highs.

I expect all this to be a top formation. If conditions look right, I am ready to go short around or above 1340.

P.S.: The rest of the blog stays the same.

ST Trading: Covered at 1304

ST Trading: Long at 1308

Weakness In Consumption; Buy the SPX

The pace of change of real personal expenditures on durable goods slows down as expected:

The stock market does not acknowledge this yet, but I expect it to do so in the following months. Still, I think the recent weakness is a short term buy. The prospect of a good employment report may pull the averages higher. The put/call ratio also favors the scenario of a rally:

I think the highs at 1340 will be reached soon.

ST Trading; Out at 1305.75

I was looking for a strong close. I still expect the market to rally for the rest of the week. I will try to go long again tomorrow.

Zig Zag

I am looking for this pattern to play out:

ST Trading: Long at 1308.5

The Rodeo

It seems to be true that the market shakes out most participants before a bigger move. It is like a rodeo and I was thrown off.

The put/call ratio is still oversold and the market finally shows strength today:

I think the gap up will force some shorts to cover, which will push the market even higher. If the market stays strong in the following days, it will give valuable information for the intermediate term top I am expecting. Should the recent highs be reached fast and with weak breadth the descent will be dramatic.

Stop is at 1299

Got to leave my desk. I am expecting a strong close today.

ST Trading: Long at 1304.75

ST Trading the SPX; Sell Oil

The market is reluctant to go up and its behavior is not exactly what I had envisioned. The pull back from the highs is already 45 points long, much bigger than other similar moves at previous tops.

The put/call ratio is oversold, but it does not imply that the market cannot continue downwards.

However, I will still have a bullish short term bias as long as yesterday's SPX lows hold. I will try again to go along as soon as I see some convincing positive action today.

Meanwhile the price of oil has gone wild. Here is a weekly chart of the April contract

I agree with Mr. Futia's analysis regarding market sentiment towards oil. I do not know about long term (years) but over the intermediate term his conclusions match my expectations of a weaker economy for a while.

This means that a good trade idea would be to sell oil. I have measured the previous up moves for this contract and the latest rally seems as big as it can get at current levels. I think a top may be in the cards even today. By my calculations, selling above $104 is a bargain.

The easing in oil prices might also spark a short term rally in the stock market.

ST Trading: Stopped Out at Break Even (1298.75)

I had set a stop loss after yesterday's close.

Entry, Stop Loss and Target

ST Trading: Long at 1298.75

ST Trading: Out at 1303

Made a mistake by leaving my desk and not putting in a stop loss.

I will try to buy again on a drop below 1300 after the lunch.

ST Trading: Long @ 1310.5

ST Trading for February the 23rd

The put/call ratio is oversold after yesterday's big drop.

Bearishness rules again judging by the most read news stories on Marketwatch.com

Also, given that the market topped during lunch time on Friday, I do not think the market is going to continue down from here over the short term. I think there will be good opportunities to go short for the intermediate term at higher prices.

This is why I will try to go long today as part of my short term trading strategy. I will only do it after a decent pull back, preferably below yesterday's close.

ST Trading: Covered at 1313.5 ES

The market is too weak and we are near the close. I will try again tomorrow.

Which One Is It?

The market had already dropped 29 SPX points, broke a support level and quickly bounced back. So I went long.

If the market went even lower and touched an even more visible support, the drop would be 33 points long, exactly the size of the Jan 19-20 one.

ST Trading: Long @ 1314 ES