the view from malibu - free trial offer
Daytrde
traders. if you would like to receive a trial through june 30,
1995, please e mail Day...@aol.com. i am a trader,
not a broker.
The View from Malibu for May 15, 1995
**************************************************
This nightly update is intended to educate traders
by encouraging an analytical approach that will
apply to all markets. Markets measure the human
emotions of fear and greed and the economic laws
of supply and demand. the sp500 futures and the
tbond futures are the markets discussed nightly
but all futures markets are traded along with an
occasional oex option. Hopefully the approach
taken will benefit you no matter what market you
trade.
if anyone would like an e mail copy of the new
system trade service, please e mail me. these
system trades are similar to those formerly
posted here, but cover more markets. this service
has no commentary and is based on a mechanical
system for day trading. it is not for every-
one, since one needs real time quotes OR a
real broker<as opposed to a discount broler> to
trade them. e mail me if you are interested and i
will send you a sample. if interested, i will
provide a free trial.
june sp500 bias:short<527.25>
*********************************
a higher high<record high> and higher low and a
close up less than a point. the revised range is
now 523.00 to 528.75<four day range>. we are short
a june nyfe at 282.40. hold for a target of 515.50
basis the june sp500 futures or a -900 tick<except at
the close>. the close only stop is above 530.
despite the input from a friendly reader below,
i still believe this market is way oversold and
will pay to hold the nyfe for the move. the reward
at 515.50 is much higher than my normal trades
reflecting the outrageous nature of this overbot
situation.
the 2.00 gap open down today was closed within the first
hour as usual. how to play it as a trader? cover a
portion of your short position and sell again when the
gap closes. each sp500 contract would have added 1000 in
profits using this method within those 45 minutes.
oex notes: expiration week
***************************
oex traders, do yourself a favor and dont trade may
options which expire next week. i know some very, very
good oex traders who wouldnt go near expiring options-
trade june only!
expiration weeks are very rarely trending<meaning they
dont go straight in one direction>. even though they
do often end the week far from the opening<usullay up!>,
it is rarely without whipsaws which make for excellent
oex trading. as the arbs unwind positions, be quick
during this next week and scalp 5/8 to 3/4.
this from a reader who has an opinion<may 11, 1995>
*******************************************************
You are going to get your a** knocked off being short
the S&P.
daytrde response:
thanks for the info, but i dont get my a** kicked
because i cut my losses. another guy told me the same
thing a few weeks ago before the market reversed intraday
after a gap open<monday after the good friday holiday>
and a healthy profit was turned. i will consider you a
contrary indicator and follow my indicators, because i
always follow my indicators. they will be right 70% of the
time, i think, so you have a 30% chance of being right.
good luck. personally, i would be short or flat right now.
anyone continually buying a market as overbot as this will
tap out sooner or later.
june bonds bias:short<109.08>
*******************************
the bonds made a lower low<108.17> as speculated yeterday but
closed down only 2 ticks on the day at 109.08. the market never
traded above 109.16<overnight high, if you got the 20 ticks,
great> so no trade went off. the green light remains on for
scalping the short side, but since we are virtually in the
middle of a very tight trading range, a position trade
will wait until at least tuesday.
trade your plan
******************
from a reader:
It would be helpful if you could write a few paragraphs about
scapling and how that differs from trading. I've gotten into
trouble by switching between time frames, between scapling and
trading.
daytrde response:
yersterday's bond trade<109.24 to 109.00> was scalping in a
time frame sense, but the 20 tick profit objective is kind of
wide to be called scalping. i consider scalping looking for
4-6 ticks of profit intraday. these trades<4-6 ticks> must be
quick. i give them 15 minutes to turn in my direction with
tight stops. if they dont move in 15 minutes i am out, profit
or not.
i understand what you mean about getting into trouble switching
time frames, but i think its more of a "do you have a plan" issue.
plan your trade and trade your plan. most run into trouble
switching while a trade is on, in other words not respecting the
plan. as soon as you leave a trade open to change during the
trade, it will not be comfortable. imagine a pilot constantly
changing course because he has no flight plan. its just as
absurd to change a trade plan.
write down what you will do EXACTLY on a trade, then relax
and remove the emotional decision making from your trading.
most of all, you will be free to analyze other trades as the
original trade plays out.
market of interest: july copper<124.95>
***************************************
the importance of close only stops is again highlighted by the
copper market which made a higher high<126.50> but reversed to
close at 124.95. probing this new supply<resistance> area
probably cleaned out the buy stops. we could be ready for some
downside acceleration. hold the 2 short copper<123 and 123.95>
with a risk to a close above 126 on one and above 128 close only
on the other.
market of interest: june crude<19.51>
*************************************
this market made a lower low at 19.18 but closed higher on the
day. this is not positive for the short crude position and its
time to exit gracefully. sell the june crude at 19.50 or
better with an intraday stop at 19.75<entry was 19.75>. if the
market does not take us out monday, exit market on close.
the account balance<30k 1/1/95> is now 38270.
thought for the day:...a market with no worries has no wall to
climb...daytrde
good trading
dt<eric>
please take to heart the following disclaimer:
1> dont trade futures unless you really understand
the risk you take for the reward you may get!
2>futures trading is risky and can result in
unlimited losses in excess of your margin
deposit
3>the use of stop loss orders may not limit your
losses to intended amount.
4>past performance is no guarantee of future results