Trade Aptitude

Quick Tip: Weather Report 

Markets are like the weather. Calm winds and sunny days turn into thunderstorms or worse. Gentle trending days in the market get upset by catalysts that send volatility soaring and price action looking like an ECG. 

Some catalysts are scheduled, like the employment report on Friday that plunged the indexes. Others pop up without warning like a midday comment from a Fed Governor at a benign conference. Back in the day it was a Trump tweet. 

As day traders we certainly need to be aware of all the scheduled (potential) catalysts. We also need to accept that sometimes price will do very unexpected things and we won’t know why. Finding out why is a waste of precious time. Having a plan of action when price action is unacceptable for your strategy is best. 

In our trade room we capture plenty of data about every trade setup across multiple strategies. Catalysts included. This data is analyzed to update filters. For example, in our volume-at-price strategy there was a time when the Globex session performed the best every day. Careful monitoring of day-of-week performance shows that currently all the money is made on Sunday and Monday nights. Good to know. 

Think creatively, research filters for your strategies and update them regularly. You’ll improve your results. 

Friday’s Best S&P Turning Points Results: Price plunged on the employment report cancelling the suggested buy @ 4039.75. (Econ filter). 

Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets): 

Short 4123.50 stop 4129.00. Buy 4047.75 stop 4044.00. Additional levels are far away. If either fails, the breakout is valid. 

Globex View: Very narrow range drifting down from the prior close but still an inside session. Looking for price to break either way after the open but just as likely to be a range-bound day. 

The World Sentiment Index: (+100/-100) JUMPS from -36 to +12 with Asia bullish and the west mildly bearish. Historically price closes HIGHER than the open 55% of the time.   

Catalysts: Factory Orders & ISM Services Index @ 10:00. Chinese Covid restrictions continue to ease, bullish for their stocks and commodities.  

Trade Fearlessly,

Mike Siewruk 

P.S. Feel free to share this blog with all your trading buddies.