The Daily Market Forecast... Lesson Day
Today’s Lesson: You need to think ahead so you don’t miss great opportunities. We’ll use a review of yesterday’s team trading session as an example of why this is so (chart above).
- A solid shorting opportunity at 4420.50 just after the opening bell stopped out. The “decision” whether to take the breakout trade came quickly. Now be honest with yourself on this… do you LIKE making trading decisions immediately after you lose? Is your confidence rock solid? Or are you a bit worried about losing “two in a row?”
Newer traders unaccustomed to the ups and downs of trading results might pass on the breakout, then watch it soar for the rest of the day and get frustrated. “Damn… I’m always picking the wrong trade!”
- Seasoned traders don’t have this problem because they PLAN AHEAD.
Going into the short trade you should know what you’re going to do NEXT if it fails and triggers the breakout. The decision to TAKE or PASS on that trade should be made beforehand. That way you won’t be affected by any emotions from the initial trade result.
For Fri 210924 (Plenty can change by the open, be aware.)
Globex Review: Small winner returned the money on the subsequent loser, which stopped out by a few ticks before running 20+ points in your favor. ☹
Day Session Analysis: Sentiment turned bearish. STATS mostly LONG. Powell @ 10:00 should drive early direction. Trading either direction. Friday (both sessions combined) garnered 25% of all the gains over the past 5 years in dollars. Reversals (78%) crush Breakouts (22%). Trading ES/CL/GC using BB Rev with new filters. Looking at SPXW credit spreads after Powell.
S&P 500 Futures CPL: 4436.50/4442.50. We’re trading BELOW the CPL (short edge below, long edge above) and BELOW the equilibrium 4426.50/4432.50 (open below = short edge, open above = long edge).
The World Index: (+100/-100) DROPS from +36 to -29 in a mildly bearish world (longs outperform shorts).
Catalysts: New Home Sales & Fed’s Powell Speaks @ 10:00. Evergrande back to looking dicey. China outlaws crypto transactions.
Trends: 60 min DOWN, daily UP but a weak-looking Bear Flag? (longs outperform shorts).
Inside day: Win/Stop% about the same, longs delivered 40% more profit. Opening -0.50% (longs outperform shorts). $TRIN XMA dips to 0.96 (long term outlook: stay long).
Globex: The range of 36 (possibly wider by the open) suggests a day session range around 51 points on a RISING ATR of 56.62. Prior forecast around 52 points, actual 53.75.
Trade Well,
Mike Siewruk
P.S. For a free “mini-course” packed full of lessons on HOW to trade the Blog… Watch this video.