Markets – Macro – Technicals

The Whisperer

whispererThe structure (see also: The Army of the 12 Monkeys) we have been following continues to work brilliantly with overnight up gap action permitting another very profitable scale out. We are now on target for MA reconnects as we approach month and quarter end.

Since today is setting up very smoothly for our positions I wanted to take this post and reflect on these past few days to highlight to our members how to best use this service. Last October we announced that Mella and I were combining our services. The merging of two different trading minds, techniques, outlooks offered the prospect of gaining additional perspectives and confidence, but also learning. Not only for members but for both of us as well as Mella and I may not always agree as we analyze these markets. But we have also realized that the key for our trading success, and that of our members, is to offer a well vetted and coordinated view of markets and trade set-ups.

Markets are always uncertain and nobody has a magic crystal ball. But we have individual strengths that, properly channeled and combined, can produce great results. I’ve long ago come to the conclusion that Mella is indeed a whisperer and I know many of our members have to come to realize this as well. Hence one of the most important lessons for me personally has been to closely listen to Mella’s tweets. She is not a trader that likes to short or day trade, but she has an enormous instinctual feel to the market based on her reading of charts that helps inform my level of conviction in taking on trades.

So let me walk you through key tweets over the past few days in context of price action. This is not an exercise in patting ourselves on our backs, but it is intended to help to inform your own trading view as you read our tweets while we try to decipher this market’s moves.

Incidentally one of our members summarized us perfectly in one recent tweet:

M 20-1

Here then let’s run through this. Mella, as you know, is a bull, but she did not like this recent market advance. As you may recall recently markets just kept going up in a straight ladder fashion:

But Mella made it perfectly clear early on that she didn’t like this advance and she also outlined a target on the $RUT that would likely signal an end to this advance:

M 20

M 20 fake

M RUT 20

All these tweets above are from March 20. Keep in mind the price context of both the $RUT and $SPX when these tweets were issued:

RUT

SPX

Now note, and this is critical here: March 23/24 remained at very high price levels and very choppy action throughout the day and the $RUT just wouldn’t budge, still we got this:

M SPX 23

RUT 24

TRAN 24

I see tweets like this and I act! In context you saw me trading to sell a very choppy market:

TF

We sold $ES and #DAX in addition and the results were spectacular. Mella’s read and feel were absolutely spot on.

M 25-1

M RUt

RUT 25

M 25 SPX

And the key lesson:

M 25

And that is the key lesson for all of us as we tend to want to anticipate the action. Waiting for the targets is key. It’s ok to day trade with stops, but while targets are not guarantees markets tend to want to reach them. One way or the other.

Mella also gave us a $VIX target:

VIX 17

What happened?

VIX

Duh indeed. And indeed the $VIX target was reached in context of the $RUT hitting the lower trend line:

RUT 26

And context matters. As we followed our structure we had already pegged Thursday as a potential low and so the decision to flip long was well founded from a risk/reward perspective as the #DAX reached its weekly 5EMA:

#DAX

And so long we went:

ES L

DAX L1

Mella was getting bullish for a bounce as well:

M_a

M26L

M 27

And this Monday morning we got the nice results:

ES L

#DAX L

The conclusion: Markets are tricky, the often choppy action makes one question one’s analysis all the time and one will experience stop outs. That’s part of the trade and the discipline. But we indeed have a whisperer in our midst and our aim continues to be to closely align our analysis and trading set-ups to formulate a market thesis one can choose to trade on in both directions.

Members get my daily write-ups and analysis, a view that is closely debated with Mella and evolves in our member feed as we take into account new and changing market data. And this is our continued commitment to trading excellence.

I am an aggressive and committed day trader, Mella is a swing trader that can ignore the intra-day chop, but comes in like a butterfly, takes a look at the structures, and offers her KISS charts which quite simply are devilishly good. This explains why she loves just charts and ignores everything else, including me! 😉

love-chart2

 

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Categorised in: Daily Market Brief, Market Analysis

7 Responses »

  1. Great post and great trades – my congratulations. BUT: The $ES (S&P E-mini Jun 15) didn’t ever trade at 2034.25 on Thursday. Its low was 2045.50. You seem to trade non-standard instruments. That is no problem, but it would make your posts much easier to follow if you note which those instruments are.

  2. OK sorry, just saw the $ES Jun 15 had a low on 2033.25 on the overnight globex session. I think you took the trade from there.

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