Trade Setup For 1st August

Here Are My Zones For August

Resistance

1271.25-1272.25
1278-1279
1284.50-1285.50
1290.50-1291.50

Support

1264.25-1263.25
1257.50-1256.50
1250.50-1249.50
1242-1241

I am not trading today as I want to take some time away to get things together.

Trade Setup for July 31st

Here are the zones I am watching for July 31st

Resistance

1285.75-1286.75
1290.50-1291.50
1300.50-1301.50
1308.50-1309.75

Support

1280-1279
1274.25-1273.25
1264.25-1263.25
1257.50-1256.50

My Outlook

Nothing has really changed since yesterday in my outlook. Oil bounced yesterday which could shake up the market a bit though it didn't do so yesterday. Apart from that though there is nothing to update on.

My Focus

Currently we are trading at the 1282 area in the overnight market. The pivotal area on the upside for tomorrow is the 1291 area. It is the previous high in the market. I do suspect we can break it from the looks of this run up so far but not sure if it will happen tomorrow. If we show significant weakness up there I will look for some form of pullback.

On the bottom end we have 1274 which is the pivotal support area. If we reach down there I would be looking for some strong buying to come in to help prop the market over the 1291 area. I think it will be important to see which one is met first, 1291 or 1274. If we hit 1291 and retrace first, its not a good sign for the buyers. However if we reach 1274 and bounce, it could be a nice set up for a new high.

I have become concerned about trending days recently. They seem to catch me out because I am limiting myself to only s/r trades. Now I prefer trading at s/r levels however on trending days it is rare to see the market use the s/r levels in the direction of the trend for pullbacks.

I do have other ways of trading but recently have been limiting myself to purely s/r levels. I define strongly trending days by the action of the Tick. Like we saw on Tuesday the market wasn't interested in any extended selling. At least for the entire morning.

Now my way of trading these trending days has been using the Fast and Slow EMA's on my 5 minute chart. They commonly are a form of moving support or resistance in trend days. You can see the way it rides the fast EMA on the Tuesday.

So when a trend day is identified via the Tick action being rather one sided, and the EMA being already respected once and following roughly a 45 degree angle, I will use that as a moving s/r in the direction of the trend. This can help me stay on the right side of the market instead of looking for the opposite move simply because I want to trade.

I am still taking my casual approach as seen in the journal with my decrease in number of entries. Trades will be at the s/r levels, either fixed or moving s/r depending on the type of day. Stops will be hidden behind strong market areas and initial profit targets will be placed in easy to reach spots. The second position will be trailed should the first target be taken.

Trade Setup For 30th July

Here are my zones I'm watching for the 30th July

Resistance

1262-1263
1269.25-1270.25
1277.25-1278.50
1285.75-1286.75

Support

1257.50-1256.50
1250.50-1249.50
1242-1241
1233.50-1232.25

My Outlook

Well we certainly threw a curve ball yesterday as Oil fueled the market into a nice gain. It is in fact enough to have me assessing this as a 1-2-3 bottom for the moment.

The VIX has made a similar pattern as the indexes but just in reverse. We now appear as though the volatility and put option interest is ready for a decline.

Oil and Gold made a surprising decline as I thought we would at least make a small bounce. At this point I will go with the flow but Oil does seem to be impacting the indexes pretty heavily lately.

The USD made some further gains yesterday which is also adding weight to the stocks making a run higher at this point. As always though I will take things with a grain of salt as each day occurs.

My Focus

We are currently trading at the 1261 area in the overnight market. As my bias is slightly bullish at this point, I would like to see a small retracement from the market prior to making possible further gains. Ideally we would see some reluctance to sell off past the 1257 area however a retest might be warranted down at the 1250 area. If either of those are met with volume and/or tick extremes or divergences, then I will look for some further gains to the upside.

If we gap above the 1263 area at the open, I would be looking for some signs of weakness to hit at the 1270 area. I wouldn't put too much weight behind a move down from there as a trend reversal though. If I do enter short up there I will keep the trade on a pretty tight leash and be ready for a trend continuation should we show signs of doing so.

For me the focus is going to remain on doing my best to trade only at the s/r levels. As much fun as riding a bucking bull is by trading everything under the sun, yeah right, I want to get my game back on track.

There is only a few ticks of lenience I am giving my s/r levels. Yesterday I made some decisions to trade in the middle of s/r zones which I would like to refrain from doing today. I am going to continue keeping tight stops behind strong areas and place my initial profit target in easy to reach areas. Trailing the second position as usual. Again, I'm going to take the casual approach to my trading but remember to only trade at the s/r zones.

Trade Setup For 23rd July

Here are my zones for 23rd July:

Resistance

1277.25-1278.50
1285.75-1286.75
1290.50-1291.50
1300.50-1301.50

Support

1270.25-1269.25
1261.75-1263
1256-1255
1246-1245

My Outlook

The buyers came through with the goods late yesterday which is a positive sign. The NDX was in trouble at the open yesterday but all the indexes managed to come through with a good run.

Leading into 1280 on the SP and 11,760 area on the DJIA is some traffic that was caught out on this downward run. It may prove to be a battle to get through but the momentum is up at this stage.

The VIX pulled out a good downward move signaling a possible end to the big selling we have recently been seeing. Will it last longer than a couple of weeks or will it turn back down to continue this downward bias in the market?

Oil is helping bring some optimism back into the market with its decline. As long as that is occurring it is a good sign for companies which means equities get a boost. Gold attempted to make a run for higher prices yesterday but has seen some selling pressure hit.

The USD managed a better day yesterday but is far from out of the woods. Oil's decline will help the USD ease.

My Focus

The late run yesterday has opened up the doors for some continued buying tomorrow. Currently we are trading near the 1275 area. If we see a decline down to the 1270 area I will be looking for some strength to enter the market. If we go beyond there, the 1262 area will need to hold to keep the buyers in control.

I'm not keen on the selling side at this point so I will leave it be for the moment. I believe we will see some selling early on but the support levels are likely to garner some extra buying power. I won't cross it out at this point though, I will be prepared to short at the resistance levels should the market present some extremes up there.

I'm continuing to take a casual approach to my trading, not writing as much in my journal so I can focus on the market. Finding things to keep me occupied whilst we are away from my levels is keeping me from jumping in the market prematurely.

My stops are going to be placed behind strong areas and the initial target in easy to reach places as per normal. Things are going well right now so it's a matter of continuing to do more of the same and not becoming overconfident. I will look at making short trades with the live account but not hold myself restricted to that. I don't want any extra pressure placed on the trading.

Trade Setup For 8th July

Here are the areas I am watching for 8th July:

Resistance

1251.75-1253
1257.5-1258.50
1265-1266
1272-1272.75

Support

1243-1241.50

My Outlook

I guess one could speculate that this is going to turn soon but you could be thinking that for a long time. I'm going to keep a neutral bias as this thing could last a long time but also turn at the drop of a hat. From a longer term perspective the May highs just look like a breather in the downtrending market from Oct 07'.

The VIX continues its steady rise indicating that Put Option interest is slowly rising. What is most concerning about this rise is that it is slow and steady, just like the markets decline. I'm guessing many buyers are getting caught out mistaking the slow decline for signs of a turnaround. I know I thought that only last week.

The only positive note coming from this market right now is Oil's decline yesterday. Not a big sell off but it is a start. I suspect we could see a decent sized move lower at this juncture. Gold has moved down rather strongly from its range highs which also signals good things for the US. It is not pivotal though as we still sit in the range.

The USD has seen some strength over the past couple of days but it isn't anything to write home about. I'll keep my eye out for further declines that could signal the US economy gaining its strength and possibly some momentum.

My Focus

I want to be careful with this market now as it is in a very temperamental area. The pattern suggests further downward movement and I will stick with that until we see something stand out to say otherwise. We are currently at 1244 in the overnight market and my last support area is at 1242.

At the 1242 area I will be looking for some strength but any long positions will be kept on a tight leash right now as other areas don't suggest a strong move higher just yet. If we open beneath 1252 I would look for some weakness if we reach that area.

If we gap above the 1252 area I would think 1265 needs to be exceeded and held to turn into a buyers market. If we gap open beneath 1242, I think all bets may be off for buying and would look for some weakness at 1242.

At the s/r levels I am watching for weakness or strength seen from the Tick and Volume. All stops are placed behind strong market areas and the initial profit target will be put in an easy to reach place. The second lot will be trailed if the first lot is taken.

To address the problem I had yesterday with exiting prematurely, I will state the reasons for exiting early according to price, Tick and Volume analysis. I will also continue using the opening gap strategy with the simulation account and also the offsetting strategy.