Thursday, August 09, 2007

Aug 9 update $1,500 on 51c

I came back in the afternoon and took some signals. Last night I stayed up until 2:30am, working 5 hours on my charts and signals, and it payed off today. I did take more heat than I should have around 3pm EST, when I went long YM. YM was chopping around at 5-10pts every couple minutes, so I was cautious in adding to my position. Overall, my signals are working and I'm doing good by keeping tight stops on volatility spikes.

P/L= $1,500 on 51c (I was much more efficient on P/L to contract ratio today, about 2x better than my avg. 3 ticks I get on ER2)

Market Review- I'm not surprised to see the market down this much today. I notice a very interesting pattern, which may be an old secret for Traders, that is, the price on the indices and bonds will return to whatever price they were before the FOMC announcement. Here is the scenario, we make a sharp movement on FOMC day, on day 2 we travel in the same direction or a little more but with no strong trend, on the 3rd we return back to where the price was before the FOMC announcement, however, this pattern only works when interest rates are left unchanged, which makes sense, right? When interest rates are cut, I'm not sure how the pattern will work out.

I wouldn't be surprised to see the market up 100pts tomorrow, however I'm expecting a lot of chop.


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