Thursday, May 08, 2008

Thursday Qs recap

A narrow range day with moderate volume. The Qs hung to the PP like glue and retraced to the pivot on every rise and fall. The pop in the NYAD at 13:20 got my attention, but the TICK was not supportive. 14:00 saw a fade in the NYAD and TICK and with the parabolics on a SELL in the Qs and the NYAD, I went short the Qs at 48.62. This was late in the day for my typical entry since, as those who have followed me for a while know, I'm not currently holding positions overnight. This was almost a mechanical trade as my sole focus was the 5 minute parabolics. I probably stuck with the trade too long, as the dithering around the PP at 15:00 was a clue of more downside to come. Nevertheless, the parabolics fired a exitshort at 15:00 and I exited at 15:05 at 48.33.
Net time in trade - 65 minutes
Trade gain - .29
Not a great trade, but I took what the market gave me, followed my trading plan and maintained my defensive posture.

3 comments:

engine said...

Bob,

First, thanks for your daily commentary. I read it every day. One question about today. You say you observed a "pop in the NYAD at 13:20 got my attention, but the TICK was not supportive." Can you explain what you saw that was not supportive compared to the trade at 14:00 that was?

bzbtrader said...

Engine,
A good question and I can understand your confusion. I will try to expand on my use of the TICK and NYAD in this weekend's Qs Update.
In today's case, I was looking for the TICK to carry through after the 13:20 pop in the NYAD. I actually watch the Qs, NYAD and TICK in both 2 minute and 5 minute bars simulataneously and look for signal confirmation before entering a trade. What happened at 13:20 was the TICK closed above R1 for the first time all day. When this happens, I want the TICK to stay above R1 for at least 10 minute to confirm a bullish trend. The TICK, in fact, broke down at 13:28 and proceeded downslope.
At 14:00 the TICK was still downslope (2 minute bars)and the NYAD and the NYAD signal line turned bearish (failure to break through R2). Now I had a TICK/NYAD short correlation and with the parabolics flashing a SELL, I felt comfortable entering short.
The TICK/NYAD tell is something I've been working on for quite a while and not every platform lets you lay pivots on the TICK and NYAD and watch them simultaneously in various time frames. You also need multiple monitors. (I use 2 laptops and 2 external screens = 4 total screens.) I'm in the process of programming it into TradeStation as a stand along indicator, but it's not ready to go yet.

bzbtrader said...

Engine,
In the first reply I neglected to clarify an important item:
At 13:20, the the NYAD break, I was looking to get long as R1 seemed like a reasonable target.
At 14:00, with the NYAD and TICK failing, I was looking to get short with the PP retracement as my first target and S1 as a more hopeful target.