Dow 2007

AC007, could you give us insight into your decisions for those buys, along with stops and targets?

Sorry, but I wouldn't buy MSFT at $10 right now. I'm going to trade the Dow short side only, bounce or no bounce. I'll only consider longs above 13,800, and even then....

I think a break of 13,000 will send us back to 12,700 in short order. Otherwise, I am waiting for strong support to show before I even consider longs. A higher low would be a good start.

This week, we have quite a few important numbers, including Jobless on Thursday and Nonfarms on Friday. BoE are to make an announcement early Thursday, which equity markets will be watching closely.

So far I will be keeping an eye on the 1h and 4h charts, just for new short signals. I think I will ignore any position trading long signals, although I may do a quick scalp (tsk tsk).

Overall, bearish on equities, considering longs on Treasuries. Oil is getting rather high - luckily I have exposure to that through CED2.L shares - overall I'm highly bullish on commodity prices, but I don't trade them directly.

I've also taken a look at my IG Index account, which now offers Options as a spreadbet. This is rather interesting to me, and I may work on "writing" some covered spreads quite soon, when I can work out the pricing models (and therefore the spread costs).

I've become more and more interested in Options trading recently, although I am grateful to Rathcoole for his advice to wait. I am looking now at the value of the 14100 YMU7 Call I was thinking of writing at the end of last week. I could cover that position for 1/3rd of the premium now.

IG are quoting 76/88 for that Option as a SpreadBet. This means that there are some folk willing to pay £176 (£2pp minimum) for the right to buy YM at 14100! As far as I am concerned that option is practically worthless, and that has nothing to do with it being far out of the money!

Anyway, options trading is too advanced for me right now. I'll start with a few covered calls on equities in a few months. Otherwise, I'm short or flat on the Dow, except over news where I will go for quick scalps.

Good trading all!
 
Hi Lurker- I Have my own way of looking at things. I am not much ino tragets but stop is must for me as I am not as cleaver as most of you people are on t2w. WFMI my trailing stop will be $1 away.If WFMI can produce good earnings it will hit $50-$60 at least. For now my targer is $40.
 
February highs...very interesting.

S&P is there as Steve points out, so a break of that support level would indicate more downside.

The Dow, on the other hand, has another 400 points to fall before it hits February highs.

Remember, on the cash $INDU, we opened last week at 13,875 and we've had a correction for less than a few days...this could well go on.

Looking back into February, we had a drop of around 800 on the cash. We've had the same drop this time.

We have very strong support at 13,200 cash, touched on 10/11 May, 8 June, approached on 27 June, and holding for 2 days now. We are at the bottom of the consolidation range which has been building since May. The bull market has been running for a few years. Perhaps we could see some real downside if 13,200 breaks, followed by downside at 13,000. I'm still "short or flat", so I'll look to sell a rally at the open once it rejects the HOD. Curiously, firewalkers system calls for shorts at the PDH on a ranging day, which this will most certainly be. I think I will short on a 10 point rejection of an important high today.

Otherwise, if we have a bullish day, I'll probably stay flat. Between 13,000 and 14,000 cash we could see further building of this consolidation range with only ranging movements. I'd really like to see a drop below 13,200 though.

Broadly speaking, we've seen the SPX reverse all growth since February. Other world indices are heavily down. Strangely IBM is showing no weakness, along with 1 or 2 other Dow constituents. We don't seem to have seen the large collapse some of us have been expecting...however there are some interesting movements in the carry pairs, NZD/USD and the Yen pairs in particular. Remember the Yen trade unwinding in Feb/Mar? This was a similar drop.

Perhaps this is as much downside as we will see. Time will tell.

I am still bearish - I am considering writing a daily expiry call option on the FTSE (strike 6300, nice and conservative). This would be through my SB account with IG. Currently I could earn a premium of 7.4 pips if it expires out of the money, as it is likely to do. I will only do this on paper though, as the complexities of options elude me.

AC007, good luck on the shares.
 
lurkerlurker said:
Perhaps this is as much downside as we will see. Time will tell.
Click to expand...

Before we have a downtrend going, we need to see a lower high first.
So although I'm convinced there'll be significant downside, building a lower high could take another couple of months imo. (or less tho).
 
Out +13. Apparent rejection of 13300. I need to get out of "news scalping" mode pretty quick and remember position trading. That was a signal to BE the stop, not exit.
 
Long 330, covered 349. +15 net of spread. These sorts of days lend themselves more to scalping unfortunately. I did hold on to my target of 350 this time, which makes for a total of 3 good disciplined trade and 1 sloppy panic exit (which I reinstated long). +91 today. I want to stop to lock in a 6 day winning streak. Of course, I won't - I'll just stop after my first loss, per my old plan....oh, those were the days. Frustration and continual losses.
 
Well done LL,
nice to see your trading moving in the right direction...well done m8 for sticking with it..
 
lurkerlurker said:
Long 13280-something. Stoploss 40. Target 350.
Click to expand...

Why did you adjust that trade when you had the perfect entry & target nicely set?

Also, what is the target based on?

I took -with the risk of sounding predictable- a long of 13280 too (Friday's lows) and exited at 350. So I guess you must've been reading my mind as you did the same trade :)
Sorry for not posting it live this time, but couldn't access the site since noon...
 
lurkerlurker said:
Long 330, covered 349. +15 net of spread. These sorts of days lend themselves more to scalping unfortunately. I did hold on to my target of 350 this time, which makes for a total of 3 good disciplined trade and 1 sloppy panic exit (which I reinstated long). +91 today. I want to stop to lock in a 6 day winning streak. Of course, I won't - I'll just stop after my first loss, per my old plan....oh, those were the days. Frustration and continual losses.
Click to expand...

Good trading, but in all honesty the sloppy panic exit didn't cost you anything this time as you re-entered and the target got hit anyway. But next time around you might not get so lucky and you'll exit, try to re-enter and price will go straight at your stop erasing all previous profits. So I would advise, if you feel panic coming up, just move the stop to BE or something like that and there you go: at least you won't be losing any money.
 
firewalker99 said:
Why did you adjust that trade when you had the perfect entry & target nicely set?

Also, what is the target based on?

I took -with the risk of sounding predictable- a long of 13280 too (Friday's lows) and exited at 350. So I guess you must've been reading my mind as you did the same trade :)
Sorry for not posting it live this time, but couldn't access the site since noon...
Click to expand...

Interesting - I had no idea you would be doing the same trade. First off, I use Atilla's 1h/4h charts to only trade in the direction of the trend. I set stops based on where I will be wrong and targets on either important S/R or swing highs/lows (1 hour charts). I am also getting better at reading the order book from the CBOT website, and I generally pick an entry within a few tics of large orders in the direction of my entry. This trade, the 280 long was based on Atilla's system saying long, large orders at 280, and the target was based on S/R and the recent swing highs. Hope this helps. Sorry again for the sloppyness, I did get back in at a good price, but I do need to be aware of this.

I will set a BE stop in future - with my SB account the stop needs to be at least 12 tics or so away, so if I can set a BE stop the market is already showing I am right to an extent. I will work on doing that rather than grabbing the profits too early. I am +91 on 4 trades, 1 sloppy, 3 good, and I think I will call it a day as I don't want to start giving back profits. Then again, I may see a good setup and risk 30 pips or so. I would quit after a losing trade, so I should get some pips for today whatever happens.
 
+9 there. Didn't see very much strength and wasn't letting that become a loss. That went against me -15 before I covered it.
 
Afternoon doldrums now. Perhaps I'll check back in at 6pm. Otherwise, +100 pips for the day net of 4 point spread over 5 trades. I'd call that firewalker-esque, but that would probably be the kiss of death for my P&L if I did!

Also, I'm still learning, and a few winning days doesn't change the fact that I am a rank amateur.
 
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