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Shorting March ES


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#1 IndexTrader

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Posted 11 January 2007 - 11:16 AM

Shorting the March ES futures at 1435.00, using a 20 point stop for the moment. New highs in the NDX unconfirmed by other indices, and other indicators, gives me a divergence worth trying to exploit. Will tighten the stop later provided I have the opportunity. :) IT

#2 S.I.M.O.N.

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Posted 11 January 2007 - 11:19 AM

Shorting the March ES futures at 1435.00, using a 20 point stop for the moment. New highs in the NDX unconfirmed by other indices, and other indicators, gives me a divergence worth trying to exploit. Will tighten the stop later provided I have the opportunity. :)

IT

I almost pulled the plug on my short trade in the nq's when i saw a short post, but given your track record i think i'll stay the course, hopefully were not shorting a rocketship " to da moon"...
*previously known as pnfwave

#3 IndexTrader

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Posted 11 January 2007 - 11:22 AM

:lol: We certainly don't need any rocket ships here. IT

#4 Cirrus

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Posted 11 January 2007 - 11:30 AM

Index... You may want to wait until later today. We have approximately 4-1 breadth and halftime is approaching! The last signal was a negative one a few days ago and although it wasn't profitable I was able to close out the EOD short flat. Surprisingly, it was the first such "Overwhelming Breadth Day Trade" signal that hasn't produced a profit in a long while. We could always see a turn during the second half but typically I've found this type of breadth is a very reliable sign that big money is at work in the market that day and the whole day will be required to deploy their capital. If the signal were to fail today I would consider it a fairly significant failure.

#5 IndexTrader

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Posted 11 January 2007 - 11:38 AM

Index...

You may want to wait until later today. We have approximately 4-1 breadth and halftime is approaching!

The last signal was a negative one a few days ago and although it wasn't profitable I was able to close out the EOD short flat. Surprisingly, it was the first such "Overwhelming Breadth Day Trade" signal that hasn't produced a profit in a long while. We could always see a turn during the second half but typically I've found this type of breadth is a very reliable sign that big money is at work in the market that day and the whole day will be required to deploy their capital. If the signal were to fail today I would consider it a fairly significant failure.


Too late....already made the trade. I'm aware of the breadth, and that the odds favor more strength here. This isn't a day trade. I'm trying to position myself for weakness later on. Two ways to look at this...divergence between NDX and SPX which resolves down. Or NDX leading the SPX up... I chose the first...we'll see what develops.

IT

#6 arbman

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Posted 11 January 2007 - 12:12 PM

IT, the indication is that the liquidity will keep coming until later this month, I think they will keep the indices up until the expirations. There were quite a few short positions piling up on the NDX with the IT top expectations. I expect a post expiration sell off and the last ramp up into the first week (or two) of Feb for the IT top. The dealers borrowed considerably ahead of the late Dec and early Jan declines, these guys made room for some of the remaining few pensions and institutions to buy, I doubt that the indices should tank right away before the expirations... From the sector cycle point of view, the energy should at least complete a dead cat bounce before the IT top comes in, so far, the tech/retails are leading, the breath is broadening into the industrials stocks and the basic material stocks are showing signs of a bottom. A sudden top here is unlikely, imho. I think we should see the utilities bottom, energy bounce and get closer to top before a considerable top... I have no doubt that the IT top is coming though, because the implied volatilites kind of made a break out and this is kind of a confirmation rally, but I think there is still a bit time, Feb is seasonally a weaker month and the slow start in January is kind of a bullish indication toward a blow off rather than trying to rally in the first week and fail... - kisa

Edited by kisacik, 11 January 2007 - 12:17 PM.


#7 pdx5

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Posted 11 January 2007 - 01:16 PM

Yes, you got it about right. I am hanging on to my 25% long position through march.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#8 arbman

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Posted 11 January 2007 - 02:08 PM

Yes, you got it about right. I am hanging on to my 25% long
position through march.





You know the biggest problem at the moment is the bullish speculation, the equity P/C is 0.53, the OEX P/C is 1.8. The overall P/C is 0.69. These are generally IT bearish, so the market pulled back right away. I am afraid this kind of setup might not be enough to provide considerable upside...