12/04/2018 Market Recap

[Cobra]

Follow through wanted, one sharp down day doesn't mean anything yet. Pullback was expected (see yesterday's Market Recap), just much larger than I thought.

[Cobra]

SUMMARY:

Recognized downtrend day a little late but it still worked which is rare. Also it's a good example why wait for a revisit is important for catching falling knifes.

NOTE:

Consolidation means continuation so down was likely here (viewtopic.php?f=2&t=3198&p=262313#p262313).

By here it still looked like a range day (viewtopic.php?f=2&t=3198&p=262336#p262336).

Clear breakdown so until here it's finally clear to me it's a downtrend day (viewtopic.php?f=2&t=3198&p=262370#p262370).

2nd chance to short (viewtopic.php?f=2&t=3198&p=262384#p262384).

A remind here that need wait for the revisit before considering buying the dip (viewtopic.php?f=2&t=3198&p=262412#p262412).

It'd be very hard to call if one more strong bull bar here (viewtopic.php?f=2&t=3198&p=262422#p262422).

Fortunately it didn't happen, the revisit fell all the way down below the day low which usually means at least a new low tomorrow (the market closed though so futures would be ugly as the world generally would be panic without US) but it also means no more down from open to close kind of days for awhile.

DISCLAIMER:

The trading log above is meant for myself only which main purpose is to help improving my market sense.

• My blah blah about how the market would go in the next dozens of minutes everyday in this forum, is a way to force me to focus on the market, because by speaking loud, if the prediction is wrong, I'd be embarrassed, which of course I'd like to avoid as much as possible.

• Day trading is not my strongest point. Just for the same pattern, it can repeat frequently on the 5 min chart while on daily chart it may take months to appear once and another month to know whether the idea of trading such a pattern is right or wrong THIS time, so practicing on the 5 min chart is a fastest way to learn to trade.

• Day trading inevitably would have good days and bad days, it's a part of the game. If I always have good days, it means I'm either lying or already the richest person in the world (then why I'm still trading?), so please don't blame me for making any bad calls. The log is for myself only, not meant to be followed.

[daytradingES]

Thanks Cobra,

Anyone:
Is ES open tomorrow? (Wednesday?)

[BullBear52x]

Thanks Cobra,

Anyone:
Is ES open tomorrow? (Wednesday?)

[daytradingES]

Due to Market Volatiity, we want you to know these levels. They are updated on this CME page daily.

CME Group U.S. equity index price limits (and corresponding CME and CBOT rules) are designed to coordinate with circuit breakers provisions as applied by the New York Stock Exchange (NYSE).

7%, 13%, and 20% price limits are applied to the futures fixing price and are effective from 8:30 a.m. CT – 3:00 p.m. CT. Mondays through Fridays.
5% up-and-down limits are effective 5:00 p.m. - 8:30 a.m. CT. Sundays through Fridays; and 3:00 p.m. - 4:00 p.m. CT, Mondays through Fridays. Between 3:00 p.m. - 4:00 p.m. the 5% price limit will not be allowed to breech the 20% daily limit.
The fixing price is the volume weighted average price, VWAP, calculated during the 30 seconds of trading from 2:59:30 p.m. – 3:00:00 p.m. CT.
View the CME Price Limits Guide - Trading Will be Halted at these Levels if reached.

(from AMP)

[daytradingES]

thanks BB

[BullBear52x]

I am expecting a good dead cat bounce tomorrow, $TRIN, Up/Down Vome, ROC all suggested a bounce is at hand from the crazy Algos selling beside buy the dip zone on an Hourly trend following setup.

ONLY Price Pays road map that can only be seen here at the SnakeVille, Peace!

[BullBear52x]

thanks BB

you are more than welcome

[BullBear52x]

For tonight going into tomorrow, 2739 is a major resistance on /ES, GL

[daytradingES]

from ZH with my notes in [brackets]

[1. Leverage of 5:1 causes back office risk managers to require selling after samll losses]

"market-neutral" and steady money makers as their managers tend to run portfolios with a roughly equal weighting of longs and shorts, or small net exposure in either a bullish or bearish direction, while "neutralizing" style, factor and sector biases.

Alas, as November showed, these mandates tend to crowd the firms - whose PMs have usually "been around the block" and have worked at all the same companies - into the same trades.

Furthermore, because individual PMs are typically forced to sell positions after relatively small losses by their back office risk controller, the firms are forced to employ massive leverage to capture upside. As a result, while Citadel, Point72 and Millennium together hold less than $100 billion in net assets, that number rises to almost half a trillion dollars when leverage is accounted for is included in the firm's "regulatory capital".

[2. market neutral selling forces multi-managers to sell]

And thus - as Bloomberg notes - began the cycle of liquidation at the multi-manager firms, as individual PMs or teams hit their risk limits, forcing them out of various positions and beginning a cycle of losses and further sales.

[3. further selling if market fails to stabilize]

That could mean more selling and additional losses if markets fail to stabilize in the coming days, especially because hedge fund managers traditionally deleverage further at the end of the year.

source:
https://www.zerohedge.com/news/2018-12- ... onths-ever

[QED]

.
It’s the Worst Time to Make Money in Markets Since 1972

https://www.bloomberg.com//news/article ... markets-vp

.

[QED]

.

"Historically, the second trading day of December [Tuesday, 12.04.18] has been a modestly bullish day ...
To find a worse second trading day of December, you would have to go all the way back to 1932 when S&P 500 dropped 3.86%."

http://jeffhirsch.tumblr.com/post/18080 ... y-and-late

.

[QED]

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The 'yield curve' explained and whether it really is a barometer for the economy and markets

https://www.cnbc.com/2018/12/04/the-yie ... meter.html

.