The Daily Market Forecast... Lesson Day

Today’s Lesson: Get in early. Trading is usually counter-intuitive. What you think should work, doesn’t.

Consider the entry on the trade above. The suggested short was 4436.50 with a stop 5.75 points above. Price moved against by only 1 point.

Some traders may not want to risk 5.75 points. The “accepted” solution I’ve heard too many times is this: move your entry deeper into the price level. Wrong.

Hard evidence from over 9000 trade setups says you don’t want to miss those quick price turns. For our Volume Profile strategy, price penetrates the level by a maximum of 1 point 31% of the time before it continues in your desired direction. Think about it. If you’re not entering early you’re giving up 31% of your winning/breakeven trades! It’s way better to move your STOP in from the other side. Morning Edition: This will be updated today (Sunday if today is Friday) at 17:30 for the Globex session.

For Mon 210927 (Plenty can change by the open, be aware.

Globex Review: One takeable trade that ran for 14.25 points to the next level and that was complete by 9 PM ET.

Day Session Analysis: Stats are mixed. No clear catalyst. Thinking range-bound. Trading either direction. Monday (both sessions combined) garnered 27% of all the gains over the past 5 years in dollars. Reversals and Breakouts are about even. Trading ES/CL/GC using BB Rev with new filters. Looking at SPXW credit spreads on a likely range-bound day.

S&P 500 Futures CPL: 4435/4442. We’re trading WITHIN the CPL (short edge below, long edge above) and JUST ABOVE the equilibrium 4436.50/4438.75 (open below = short edge, open above = long edge).

The World Index: (+100/-100) LIFTS from -29 to +21 in a mildly bullish world (shorts outperform longs).

Catalysts: Durable Goods @ 8:30. Looks like the market didn’t like the German election results (price peaked and dropped hard from the Euro open).

Trends: 60 min DOWN, daily UP (longs outperform shorts).

High outside day: Win/Stop% about the same, shorts delivered 20% more profit. Opening near flat (no edge). $TRIN XMA dips to 0.92 (long term outlook: stay long).

Globex: The range of 34.25 (possibly wider by the open) suggests a day session range around 50 points on a FALLING ATR of 53.77. Prior forecast around 51 points, actual 35.25.

Trade Well,

Mike Siewruk

P.S. For a free “mini-course” packed full of lessons on HOW to trade the Blog… Watch this video.