Apr 052012

We probed into territory below last week's low this week which was a bit unexpected on my part.   I have maintained we are in a longer term up cycle at least into the 1429 area.  We have an average weekly range in the 34 point area and this week has been about normal (remember tomorrow (4/6) is closed.

I continue to work on the Nindicator project and am testing some of the concepts in live trade as well as work out bugs on the remaining work to be done.  This has been a full time endeavor for me for many weeks and it has has an increasing intensity especially in the last two weeks.

There are about 21 indicators in the package and I am also writing a manual on just exactly how to use them, though the combinations are huge, I have done this with the idea that the use of them will fit the personality of any user. In this way, the Nindicator package is comprehensive.

One thing that is really nice about putting this kind of package together is you learn a lot- a real lot.  Even after doing this for 20 + years, I find I have learned more in the last year than all the others combined.  Enough said on this for now.

It is likely the market will try to be higher overall next week, but there is a good chance that the coming weeks will be characterized more by congestion than directional play.   Because of this, it is likely that the best way for me to be of service is through the continued demonstration of the Daily Target I put out on twitter.  I wrote a couple examples of its use this week here:  http://markettradersjournal.com/?cat=27  - so take a look at that.

I usually try to get the trading done earlier in the day as the price action is larger in the first couple hours most of the time, making for better opportunity.  Below is an equity curve for the last couple weeks as I have had the opportunity to test the new Nindicators as they have come in from the programmer.  I expect to have these ready to share somewhere around June 1st or so.

Past performance is not necessarily indicative of future results.

Nindicator Trading Equity Curve

Nindicator Trading Equity Curve (last 2 weeks)











So, as the Nindicators are released, it will give me the opportunity to teach some of these methods to others- through the tools, videos and the manual.

As the Nindicators are brought into a fuller state of completion, I will start showing specific examples- hopefully in the coming weeks.

A few more notes on the market before going off on a long weekend....

The market (ES Emini Futures) is currently in a range bounded by the 1417 area to the upside and the 1381 area to the downside. I expect this lower area to act as support, and I do not expect to see the market getting to the upper part of this range. As a result, consolidation may likely be the theme for next week. 1397 area stands as the midpoint/control point.

There is a  gap / Lapse beginning at the 1398.50 area. There is also a virgin point at the 1407 area.  This would be a likely upper boundary and fading a run up into this area may be worth the risk.

Report wise, we are seeing Thursday and Friday as the most likely volatility days. Be sure to be aware of reports on these days.

Much of the market action has been correlated with reports. For example, this week, the FOMC minutes definitely were the catalyst sending the marker lower from there; having more negative impact than I had expected. For this reason, it is important to keep abreast of reports that are coming out and being defensive in the way it impacts your position.

We have been in a long upward trend that in recent weeks has turned into a congestion area.  A break below the 1385 area on volume and/or a closing basis, would be particularly bearish and we are due for some reasonable retracement/correction.

The daily ranges in the last couple weeks have increased and increasing volatility is typically bearish. So, use caution.

As of this writing, the trend is certainly down but the duration of the cycle is such that it should try to test higher.

As mentioned in last week's update, a test of 1390 would be healthy and that is where we stand now. As a result, the risk reward profile right now for an upside bias next week if fairly attractive.

Have a great weekend and great trading next week!

That's all for now.....

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8 × = fifty six

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