TRANSITIONING MARKETS CREATE SWINGS 3/21/14

Nice end to a week.  Market opened and seem spooked by the high of the day.  Some were looking at YM pushing higher.  I was watching NQ and thought the read was a market ready to short or sell off for the day.  Bias in, look for the trade, have a strategy for exiting.

[09:47] <CM> gm  nervous open  something is about to be released
[09:52] <CM> mkts spooked at highs? bears seem to be looking for reason to swing lower

A multi-market look is akin to a multi-chart look:  both can provide a clue to the market.  The read was a market trying to sell, and if wrong, the upside risk was known (HOD or some percentage of it).

Do not be distracted by the trade to the point you miss the why for the trade.

Exit, and look for the next trade.  My personal bias is that buyers/sellers will look for a +8 to +10 return on their investment when in a strong move, making the exit a -8 from the ES HOD.

[10:09] <CM> looking for ES -8 from hod

 [10:27] <CM> buyer support hit es -8 area from hod
[10:28] <CM> ym recovery push
[10:32] <CM> buy the falling knife...
[10:34] <CM> ym should pull others to ema

The new vigor in YM was expected to pull the other markets higher

The markets seem to be turning (read) for a quality pull back.  Had a why, a target, and known risk at the lows.

Sometimes looking at the trade helps to clarify the thought behind the trade.  Read the market, practice, know why to enter, your plan, and your exit.  Also try to get a feel for the risk involved.  Risk is always in the market and the best you can do is try to minimize it.

Enough on trades. back to discussions next week.