Fine-Tune Your Entries With This Indicator
The December S&P 500 and
Dow futures woke up with a hangover to open Thursday’s session with
gaps to the downside, after Wednesday’s move factored in
(
AMAT |
Quote |
Chart |
News |
PowerRating)‘s earnings
report and slightly better-than-expected Jobless Claims. A rare earnings miss
from
(
WMT |
Quote |
Chart |
News |
PowerRating) also cast a shadow over the bulls. However, good broker buying
came in to fill the majority of the gap, before the contract headed south again
to break its Daily Pivot. A post-lunch push to test Wednesday’s high at 1,059
was interrupted by the early release of
(
DELL |
Quote |
Chart |
News |
PowerRating)‘s earnings report, which
threw the futures into fast market conditions as stops above 1,059 were swept
out.
The December S&P 500 futures closed Thursday’s
session with a gain of +1.00 point, and finished in the upper 1/2 of the daily
range. The December Dow futures closed the session with a -6 point loss, and
also finished in the upper 1/2 of its range. Volume in the ES and YM was
estimated at 575,000 and 47,279 contracts respectively, which was behind
Wednesday’s pace and below the daily average. Open interest declined with
Wednesday’s trend day, continuing the recent pattern of longs taking money off
the table into the advances.
On a daily basis, the ES didn’t really make any
headway as the contract just fell short again of breaking long on the 3-Line
Break chart and still needs to get through last Friday’s high to resume the
year’s rally. On an intraday basis, the 60-min, 30-min, and 13-min charts all
formed the handles on their cups with sell-side divergence due to the DELL
earnings news spike, but were unable to break the patterns (see chart). The YM
posted an inside day and bounced off of its 10-day MA, with resistance remaining
at the yearly high at 9,915.
Friday morning brings back enough economic
reports to stir things up starting at 8:30 ET with the Oct. Producer Price
Index, and its consensus of 0.2% and 0.1% for the core. Oct. Retail Sales is
expected to come in at a (0.2%) decrease and 0.2% increase ex-Auto. After the
open, at 9:45 ET, the Michigan Consumer Sentiment Index is expected to be
released with a consensus of 91.3, up from the previous 89.6.
Handy Tip: Are you using the TICK to fine tune
your entries and exits?
The NYSE TICK can be used to “fine tune” your
entries and exits. Common sense dictates not entering long on a high TICK
extreme or entering short on a low TICK extreme. If you do, you’re probably
going to have to endure some pain unless price is fading the TICK (which we’ll
discuss more in detail next week). I consider a TICK extreme to be +/-750, but
I also use 60-length Bollinger Bands on a 1-min chart to get a better feel for
the TICK’s range. Give them a try and you’ll see that many times, they contain
the TICK’s range nicely and are a great tool for order execution.
Please feel free to email me with any questions
you might have, and have a great trading day on Friday!
Chris Curran
chrisc@tradingmarkets.com