Wednesday, February 28, 2007

Feb 28 daily chart


First off let me say that the media is full of BS when it comes to what really happens in the stock market. CNBC is doing it again today (I listen to CNBC in the background). What do I mean? Bob pisani, saying that Bernanke moved the market up this morning. Bernanke didn't move anything, it was weak short covering both in equities and bonds that occured before bernanke even sat down. Now we have Bill Griffeth saying that yesterdays 500+pt drop on the dow was due to a computer glitch. PLEASE get the facts straight! YM had no discrepancies in price. When YM was down 400+ pts, DJI was only down 280pts according to CNBC. What really happened was that retail traders were getting burnt to smetherings from forced margin calls yesterday, which added to the fire, and resulted in the huge drop. I remember watching CNBC's fast money this last weekend were the head retail trader said to sell radioshack before earnings, nice call,,not.(RSH was up 18% after earnings).

I traded on the simulator today because I'm working on my trade execution, although I wish I was trading with my real account, I need the practice. There will always be another day to trade, but right now I need to hone my execution skills. I've had to switch back to trading off of the ER2 chart because my IWM tick chart looks scattered.
Today we had several AMEX tick reversals, first a -100 amex tick reversal and then a 100 and 200 tick reversal all at the key reversal points of the morning. I'm seeing a new trading pattern, which is if we get program trading at 9:45am est, and then we later reverse above/below that level within the next 30min, then look to go with the reversal. I need to get rid of some of my charts on my monitors to speed up the CPU's processing or get a better computer because my computer is not running efficiently enough for the volatility that the markets are showing right now.

Here's the morning chart with my drawn in trendlines and red block trade signals. I've refined my NYSE TICK chart with a new filter for volatility spike reversals using bollinger bands and starc bands overlayed.



I traded my regular size and did good on the simulator today, about 2-3 losing trades that were cut at 0.7pt losses, and some good winners with size. I missed the short covering rally to 798 because I left the room, but I got some good action and I'm pleased with my trades for the day. I need more work on incorporating the TICK volatility signals with block trade signals.

P/L on simulator=$~1300

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