May 26th running commentary

I anticipated a down day today in the S&P500...for no other reason than I figured that I should pick a direction. Seeing as the pre-market was mostly below Friday's range I figured it was an OK shot...but not worth trading solely on that premise. As it turns out I was wrong...a day when being able to change trading plans on the fly and not getting stuck into being "right" are important.

By 1000h the SSO, SPY etc hit the pivot point at $24.53 and never slowed down until past the R2. I am determined to only play the TICK setups that I now know to be high probability setups but I was not on the ball this morning (phone calls for most of the AM) so I did not get in until later on.

Check the overlayed chart with the SPX in black followed by financials, technology, health care and energy. I have another that includes some other important sector ETFs but I can only fit five on one chart so I run two charts with the SPX as a reference between the two. It looks OK. Today it was pretty obvious that everything was, more or less, in synch

Here is the TICK chart with the notated trade triggers in green arrows with the possible trade entries in the following black arrows:

Here is the SSO chart with the corresponding trades noted. I only marked the first actual trade entry for each trigger. Note that trade 2 was the only one that I got into today due to AM phone calls and afternoon appointments. Most of the others I tracked including the very first one.

I ended up getting stopped out, I didn't notice the 100VWMA (purple) coming up to the price level, I should pay attention to this as it seems to be a fairly relevant support line often. Seeing as I was quite late getting in I tried to keep a tight stop loss using recent resistance...I made a few bucks but there was more potential left in the move.

Once I get more confidence in my trades in this market using this style I will feel better about letting the stop ride longer. This move did take a long time to get going though so I suppose it wasn't so bad to be out. Long consolidations tend to be unpredictable...for me, so far, at least.

Hmmm...the TICK trigger trading looks simple but there is a lot more going on behind the scenes than I really think about anymore. If, for some unusual reason, this does not work out to be a tradeable system the whole point is moot. Although I expect it to work out nicely, once I get my rules in place and start applying them properly, it will not be quite as simple as "this does that then do this". There is the stop setting, which I have not nailed yet, the entry timing, the market movement mode (trending, ranging etc) and some other stuff that seems "common sense" now but in some way affects the trade management.

Oh well...likely not much trading tomorrow, off to see some distributors and clients in the city. Maybe one or two morning trades if I can manage to squeeze them in AND they setup perfectly for me.

Jeff.