A LOOK AT THE WEEK FOR BOTS 3/30/12

SOMETHING new, a look at BOT plays in the market for the week.

RANGE RUNS MAKE MONEY 3/30/12

LONG day so the talk will be short.  The market for some of us began with the shorting in the bear channel.  A FBO of the LB will tend to run the range.  At least that is what some $ traders are doing.  Range run make money.

If your not into holding, then range runs make money by playing run segments.  Both plays were available today and strong plays.  The next valuable play is the BO pattern to the BO-5 level.  Today the BO-5 run hit resistance just above the BO-5 level.  This area was referred to in chat as PA Gap.  We look for these as reversal points and today delivered at B15-16 with buy signals/entries.  T1 and T2 were hit.and T2 became support to those still holding longs/entering new longs.

The bear channel came from a 50CB bar.  At the end of the day an ascending triangle developed from a 50CB bar.  The range run completed, however the triangle did not break for the bulls, and PA tested support at yesterday's LB.

Nice month; nice week, and a nice day.  Range Runs Rock...

FBO LONG WITH A REVERSAL RANGE RUN REPEATS 3/29/12

BOT TRADING SYSTEM


AKIN to yesterdays trading, PA had a LBBO that failed, and created a reversal short for the range run.  It is what is expected with BOT Ranges.  What was different, the range run was more stable that yesterdays jerking action that tended to take traders out.

Exited shorts at the sign of a revived bull-B4 in the US Open.  The watch was for a SB bounce.  We did see signalling in B1-b3 of bull support at 1391.   This failed and the watch was over.  Shorts were ok at the SB and they produced another +3

Day over, and worth the early play.  Time to enjoy the day..

UPDATE

the 8 am TL continued to be resistance.  We had two nice SBBO  the last stalled at support and began an ascending triangle.  1387 was showing support, and I discussed in chat that the BO-5 level was considered the extent of the selling.  By B57 we have a low risk long:  above the bear TL, PA gap to the EMS, cross of the SB, and a BO of the triangle (top was the short BOT).

Some exits at 1394, but any shorting would need to wait for an entry closer to the Middle BOT.  Bulls tried to reclaim the 1400, settling for 1398.

LB FBO WITH A RANGE RUN SBBO 3/28/12

TODAY we had a failed break out at the long BOT in the Euro Zone hours which led to a range run and short BOT break out to SB-2, SB-5, and SB-10 area.  Since most readers are not in the IRC, the chat log is listed today to analyze trades.  All links are deleted, and private names have been removed .  Chat can be cryptic, but you should be able to figure it out


EURO ZONE

CHAT

1[06:17] <CM> new overnight BOT levels  Euro Zone mostly a H&S type  but some range run play  back later.  (link deleted)

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01[06:22] <CM> looking pos for the range run to LB to try the highs  (link deleted)  final longs exit at be (the gap at B231)

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01[06:29] <CM> if this continues the range run: 1 move stp to TL 7.5 area then around 50% of the LB-MB range adjust again

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01[06:48] <CM> still ok  MB and EMA and TL not violated  exits to consider for the range run are : the lb  lb -2  LBBO-5   these may stall and not hit until the US Mkt but are valid levels

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1[07:40] <CM> range run still in play  adj the 7.5 stp to 1409  prior targets still valid   (link deleted)

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01[07:43] <CM> the ema is MB+ and allows us to adj the stp for added profit in the range run

[07:49] <xyz> anyone short?

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01[07:51] <CM> exit trade done

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01[07:53] <CM> still bull channel  at MB and vwap  will past this time on short  back later

[07:54] <xyz> you were long?

[07:54] <xyz> what price?

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01[07:55] <CM> yes from 5.75  was posting before you arrived  will add comments to blog this evening  the ranges today are 12.5-8.75-5.5   (link deleted)

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01[07:57] <CM> had moved stp from 7.5 to 09 when pa hit 50% of the LB-MB range

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01[07:58] <CM> meeting at 8 cant trade for a few..




THE US MARKET

THE CHAT

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01[09:38] <CM> GM ALL  SB longs  see if mini bear pb to SB breaks higher  had expected a range run possible delay until us mkt  targets 12.25  lb+2  lbbo-5  trailing stp 

[09:40] <x> what is sb?

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01[09:40] <CM> short bot

[09:41] <x> what is this mean short bot long

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01[09:41] <CM> this was the euro zone action discussions were posted and will be in blog later this evening 

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01[09:42] <CM> (x)  longs taken at the sb which is support  will not short until it breaks.   bots are where pa favors the long/short as dominant

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01[09:43] <CM> ex part 7.25 bal stp at 5.75

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1[09:44] <CM> ready for switch

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01[09:44] <CM> nice bear CB b3

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01[09:46] <CM> continuation shorts entering

[09:47] <c> what’s the target

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01[09:47] <CM> mine is bo2 and bo-5

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01[09:59] <CM> sb reversal

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01[10:01] <CM> 1407 is 50cb of that bear cb

[10:02] <c> anyone thinking new hod?

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01[10:02] <CM> y

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01[10:04] <CM> +1 and run

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1[10:05] <CM> stp to profit win-win

[10:08] <o> cm, is your sb at 1405.5?

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01[10:09] <CM> y

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01[10:09] <CM> 12.5-08.75-5.5

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01[10:10] <CM> stp out

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01[10:10] <CM> look for new long 7-7.25 sh the sb

[10:15] <o> CM, if a bar closes below your SB, do you sell short?

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01[10:16] <CM> with tight range as yday and today yes  but low risk to take it exactly

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1[10:17] <CM> sh 5.5

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01[10:54] <CM> ok back  the t1 hit t2 will move if bear is strong at bo-5 

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1[11:21] <CM> pa flat  stop above ema  bo-5 still open target

[11:24] <CM> w/o new sellers the threat of a narrow range day lurks

[11:32] <CM> t2 to 1397

[11:37] <CM> bo-5 hit

[11:47] <CM> es stp to 1401 target 2 still 1397

[11:52] <CM> ding 97 out

[12:43] <CM> the rev has an opportunity to retrace to bo-5 1400 area (link deleted)

That is a look at the thoughts as the market developed.  By B58-59 we had a buy set up for the run to the BO-5 level.  Exits (marked with X) were taken at +1, +3, and +4 as PA moved back to the discussed 1400 level and the BO-5.  With BOTs

THE GOOD, THE BAD, AND THE UGLY 3/27/12

BOT TRADING SYSTEM

Sorry Clint, it occurs in trading too.  Good, great, boring, bad, and just plain ugly.  To understand the US Market  today we must look back at the Euro Zone trading.  Last evening we were shorting 15.75.  Going into the Euro Zone Open PA was declining again when a strong buy signal hit, and it was a PA gap to the SB.

Nice run to break the LB ending in a short signal which also formed a DT.  The next short advantage was the BO of the 50CB at the double top.  This bullish TL ran into the US Open.

This is what would be considered the good and the great!  A FBO that did not hit the LB BO-5 level tends to run the range to the opposite target.

The bad and ugly?  See the US market today for the ES.  PA struggled to break the B1 range, and was clinging to the SB.  The bear channel (TL) continued, and there will always be traders that enter at/near the high and low of the channel.  B20 was the first entry in this market.  A long back to the SB/TL resistance followed by a second entry at B29.  PA ran back into the B1 range and failed for a nice short.  A double bottom buy signal hit for a long back to the B1 range.

The last play was a bracket type.  When PA is consolidating a BO will occur (eventually) and traders will bracket the consolidation.  The attempt is to place the order outside the PA thrashing that will eat your lunch.  I prefer to play the break of these targets.  The upper hit, but no break.  The lower produced a +1 EOD  trade, while others held for the BO-5 target. 

The Ugly for most of the US Market was a narrow range of trading around the SB magnet.  There is nothing wrong with staying out of this action; wait for the good and great.  I would suggest you practice the  trades.  This action is reminiscent of slow summer trading with narrow ranges.  A 3-4 point range is difficult to master, but you still need it to weather those extended periods that test every one's patience.

BREAK OUTS RETURN! 3/26/12

BO BONANZA.  In the Saturday outlook we were waiting,  Patiently waiting.  Range runs are good, but BO's are super.  The markets opened with a continuation to the BO-5 and was relatively quiet until the Euro Zone trading. As mentioned, PA was trapped in a range 1383-1395 and the BOT Ranges were unchanged.  Watch for the reversal back into the range or a BO of the 1395.  Either way, we have plays for each.

PA sold off at the Euro Zone Open (roughly 3 AM EST) but failed to break the LB.  For new readers, We use a calculation which predicts the range of trading expected for the 24 hour day.  This measure has a Break Out Target (BOT) for longs and for shorts,  These BOTs are where one side will dominate the trading.  A FBO at this area or a FBO at the BO-5 level above/below the BOT tends to reverse for a run to the opposite level.

At 3:40 AM EST we test the LB and buy signals hit, but PA stalls in the bearish channel and re-tests the LB.  An ascending triangle develops around 4:40 to 5:40 AM EST and we have a host of long signals hit:  LB support, a buy TL in play, EMA BO, and, very important, a BO of the bear channel and 1395.

PA gaps to the buy TL continue as bullish signals and  PA runs for a BO-10.

The 50CB level of the extended bull bar around 8 AM was never challenged- another bullish indicator.  The EMA holds PB's as PA challenged the previous resistance at 1407.

We began with a AT BO and find another ascending triangle late in the day.  The upper level was roughly at the BO-15.  It broke and was seen as support , along with the EMA, on the PB.  Near the EOD but this was a low risk  long to 11.5 area as a minimum.

With PA range bound, a return of the BO plays was a mater of time.  An extended range bound period will tend to produce an extended, bold  Break Out run..

TODAY was bold....

OUTLOOK: MARKET OPEN 3/25/12

BOT TRADING SYSTEM

A few thoughts.

• The ES 60m is at the upper end of the recent trading range 1383-1395.   There is the potential for this to continue with a double top reversal.  The extended watch will be a BO of this range.
• The weekly ES has formed an "R" reversal pattern.  Think of the lowercase r. we have a run bar with a smaller reversal bar above the 50CB level. 
• The daily is trapped between the EMA and resistance at 1407+/-
• The 5m push to form a LBBO was at the end of the day when books are cleared.  The reason we do not hold over the close is the risk that this is artificial and a PB to the "boxed" area  reported in the previous post is likely to hit.

Enough uncertainty not to hold longs over the close, and not jump in on low volume moves at the open.  New Break Out Targets will be calculated only if the market PA  can maintain a price > BO-5 of the current BOT range.  Range runs will be favored until PA shows a return to extended BO's.

CURRENT ES CALCULATED RANGE:  1393-1391.75-1389

BREAK OUTS CONTAINED, YET A 10+ DAY 3/23/12

TO understand the US Market today, you need to step back a few days.Weakness was noted, and PA was hitting resistance around 1405-1407.  The thought is: before a new leg higher could develop, a pullback would be seen.  The outlook was to the 1370-1345 zone.  The reason for this seems simple enough.  Money will enter at a better buy price, thus the PA moves to that point.  This usually finds some news seemingly supporting the move lower.  For shorting, the reverse action occurs: PA moves higher then dumps.  The "news" is merely the smoke to get the desired entry points, and usually creates the desired greed (PA higher then dump) or fear (move lower then bounce) in the general market players.

Here is an example:  Markets moving higher then news hits concerned about Dubai payments.  Odd; wasn't the previous news to get the push higher positive on Dubai?  PA retracts and ding, new buying.  Back to the positive spin on Dubai will have no problem making the payments.  Spring forward, and you can insert Greece, Italy, and so on.

Euro Zone

The ES was tame entering the Euro Zone trading.  The Short Bot (SB) held and we had a nice range run and Long Bot (LB) test and follow through BO.  We see a nice range run channel develop when the BO-5 failed(i.e. failed to reach 1398).  The expectation on a BO is a run to the BO-5 and if this fails, we tend to see a reversal run to the opposite BOT.  Another BO at the SB and it failed the BO-5 test, but was finding resistance at the US Open.  This information was a critical piece in playing the US trade period.  By bar 9-10 we have a buy signal .  This is below the BO-5 level, yet PA selling in bars 7 & 8 could not reach BO-10.

PA could fail the 50CB level and continue lower.  With the MAXT at the 50CB it seem favorable, but B13 reversed the MAXT and was a valid conservative long.  Earlier longs at b9-10 simple were going with the market mode that the best plays today would be the range runs, not extended BO's.  This philosophy paid well today with the BOT Ranges.

PA around b34 broke the bullish buyer TL,, and had trouble breaking the EMA/SB support.  A new buy TL developed leading to a challenge of the LB.  The gap in PA(see box) holding around the EMA and above the SB was also bullish and would likely create another challenge of the LB.  Day done.

At the end the book clearing did get late day traders a LBBO.

ES MARKET LOOK 3/15/12

The ranges were again active as PA moved down the range run going into the US Open.  B4 reversal provided a nice run to test the long.  A MAXT reversal at the LB was the short call, however a new HL with a price gap to the SB signaled new long interest,  Those that do not try the ranges were given a long signal at B32 close above the LB.  B27 was used by EMA buyers, although B30 was a better choice as it was a reversal of B29, another HL, and had a PA gap above the EMA.  We also had an ascending wedge with the LB as the top.

3/8/12 RANGE RUN BREAK OUT

Favorite trades continue into 2012.  Today we see an early pre-open range run that reversed at the short, and was followed by a positive range run long.  More good news when the long held for new entries as PA push for the BO-5 level.