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Bittersweet New Highs

Posted by John Doherty on January 16, 2020

The Failed Top Trade

Earlier this week I posted a blog article laying out guidelines and best practices for picking tops. As it turns out, this has been a textbook week to put them into practice…

Failed top trades have been a great scalp the last few days. The failed top trade consists of putting an offer in 2 ticks above the high with a 6 tick stop and a 12 tick profit target (for the e-mini S&P 500 futures).

This is the type of trade that should never be turned into a loser once it turns into a small winner. If it goes your way even a little, you should be prepared to scratch before it goes against you.

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Topics: Market Updates, Trader Behavior, Trading Lessons, Trading Psychology, Futures, Equities, E-Mini S&P, Trading Education, Market Forecast

Are You Trying To Pick Tops?

Posted by John Doherty on January 13, 2020

I went out on a limb during Monday morning’s Market Forecast video by saying that the January Break started with the poor jobs report Friday. It was my first contribution to the daily video, and since it wasn’t a very good call, hopefully it won’t be my last. In hindsight, coming out swinging on my first day telling people to short the S&P probably wasn’t the best way to kick things off.

On a quiet news day, a thin-to-win type of trading environment took over, and before the noon hour struck (Central Time) my early call for a pullback was turned to dust. Even though the S&P 500 futures didn't print a new high until near the close, I don’t feel vindicated in the least bit. I know I’m toast on this one. The old adage that says you should “never short a quiet market” rings as true today as the first day it was written.

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Topics: Market Updates, Trader Behavior, Trading Lessons, Trading Psychology, Futures, Equities, E-Mini S&P, Trading Education, Stocks, video, Market Forecast

More Highs Please!

Posted by TopstepTrader on January 09, 2020

Got another one this morning! After the 8:30 CT bell, the S&P 500 and Nasdaq futures both notched another high print on their belts. Dow futures came close, falling shy by just a few ticks, and then came roaring back about an hour later to complete the trifecta! 

I wouldn’t necessarily say we’re off to a booming start, but the S&P 500 futures are up just over 1% since the Dec. 31 close, and has printed a new all-time high in 4 of the 6 trading sessions so far this year.

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Topics: Market Updates, Futures, Equities, Nasdaq, E-Mini S&P, Stocks, Dow

Resilience Is a Thing

Posted by TopstepTrader on January 06, 2020

After sustaining early losses before markets in Asia closed early Monday morning, stocks in the U.S. and Europe slowly began to recover, with the biggest boost coming right on the 8:30 CT opening bell. In the first 2 hours of regular trading hours (RTH), the S&P 500 futures had rallied more than 20 handles, and the Dow and Nasdaq followed close behind.

It’s debatable to say which sector was really the front runner, but most people will say it was tech. In the same time period that the S&P rallied 20 handles, the Nasdaq rallied more than 200 points, with Amazon and Cisco leading the charge.

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Topics: Market Updates, Futures, Equities, E-Mini S&P, Stocks

Oil Spikes, Equities Sell Off as Iran Vows Revenge

Posted by TopstepTrader on January 03, 2020

Just yesterday, we were celebrating market highs. And then everything changed. 

Last night (Chicago-time), the U.S. ordered an airstrike that took out a top Iranian general who, by most accounts, was very dangerous, but much beloved by Iran. Iran vowed that it will revenge the death, while the U.S. and its allies in the region are taking measures to minimize any potential retaliation. 

And markets are responding in kind. February Crude Oil ($CLG0) and Gold spiked—as you could imagine. Crude Oil is up 3.7%, or $2.25, at writing, while Gold gained 1.4%, or $21. Simultaneously, the budding tension caused traders to sell off equity futures in favor of the perceived safety of U.S. Treasury Bonds. 

Regardless of what happens today, the landscape shifted... at least for now. Here's what you have to know and, more importantly, what you have to do.

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Topics: Futures, E-Mini S&P, Crude Oil, Iran, President Donald Trump

Will Santa Show For Stocks?

Posted by TopstepTrader on January 02, 2020

ALL-TIME HIGHS! At least in Dow, Nasdaq and S&P Futures. Thanks Santa! 

But how much value does Santa really bring to the stock market after his rally? Well, according to the Stock Trader’s Almanac, the S&P 500 has a high historical probability of posting an average gain of 1.3% in the last five trading days of the year and the first two trading days of the new year (The Santa Claus Rally). 

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Topics: Market Updates, Futures, Equities, E-Mini S&P, Stocks, Holidays

The Complete Beginner's Guide to Market Internals

Posted by Pat Crawley on December 08, 2019

Looking at market internals is like looking under the hood of a car. From outside the vehicle, you can see a lot. If the car is making odd noises, if smoke is emitting from the exhaust pipe, and so on. But to know what is going on with the engine, you have to pop the hood. The same is true of the stock market.

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Topics: Trading Plan, Futures, E-Mini S&P, Stocks, Indicators

3 Indicators ES Traders Need to Watch

Posted by Pat Crawley on December 01, 2019

The SierraChart platform alone has about 400 technical indicators, with hundreds more available to purchase from third-party vendors. Beyond the realm of technical indicators, you can use other securities or indexes as an indicator for the security your trading.

The point I'm trying to get across here is that the signal-to-noise ratio in the trading world is abysmal. At each corner you turn, someone is trying to sell you an indicator, a system, alerts, chat rooms, and so on. Just a handful of these tools of the thousands of options you have are valuable.

In this article, we look at three indicators that /ES traders can use to reduce the noise they experience from indicator overload: VWAP with standard deviation bands, the TICK index, and market profile.

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Topics: Trading Plan, Futures, E-Mini S&P, Stocks, Indicators

31 Thoughts About the S&P  Hitting 3,100

Posted by Jack P. on November 12, 2019

Perhaps you noticed that the S&P 500 hit 3,100 for the first time today? If you did not, let me assure you that this is indeed a thing that happened (albeit briefly).

In no particular order, here are 31 thoughts and questions that came to mind as we witnessed the index break this purely psychological barrier. 

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Topics: Futures, E-Mini S&P, Stocks, Random Thoughts, Lists

Earnings Take Spotlight with S&P 500 in Rally Mode

Posted by TopstepTrader on July 15, 2019

Here come earnings. Several large companies report over the next few days and then the floodgate on second quarter results opens wide next week. The S&P has been in rally mode heading into the reporting season and now the question is: Can corporate America deliver numbers that justify the lofty increase in share prices?

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Topics: Equities, E-Mini S&P, trading strategy

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