How Do You Handle The Down Time?
On Monday, the smell of
Autumn was in the air, or was that the smell of quarter-end window
dressing? The December S&P 500 futures (SPU and ESU) opened Monday’s session
with a +3.50 gap to the upside after 3 red sessions in a row. The contract
traded in a tight range for the first hour, highlighted by repeated failures to
break R1 resistance just under 1,000. Sellers finally took over, pushing the
futures to fill the gap and test Friday’s low in the 994 area. The test and
hold of support gave confidence to buyers as the contract did a U-turn and
consolidated into a bull flag before being propelled up through Friday’s high at
1,002 to a new session high. The next 3 hours saw a tight 2-3 point range, with
R2 resistance at 1,005 holding overhead, until the weak bond close triggered
some selling back down to the 1,000 area. Buyers again stepped up to the plate
and pushed the contract back up into its lunchtime range, just under the high of
the session.
The December S&P 500 futures
closed Monday’s session with a gain of +9.75 points, and finished in the top 1/3
of its daily range. Volume in the ES was estimated at 739,000, which was in line
with Friday’s pace, and above the daily average. On a daily basis, the contract
posted a market structure low and was able to close back above its 50-day MA at
999.50. On an intraday basis, the 60-min bullish Butterfly reversed off of the
993.50 area. The pattern had a wing pulled off with the afternoon chop, but
still gives a target in the 1,015 area. The daily Banking Index (BKX) also
posted a market structure low at trend line support and closed back above its
20-day and 50-day MAs. 3-Line Break players were rewarded with one of the nicest
moves in a LONG time off the 994.50 reversal that produced a nice Fib symmetric
21 lines, before the market turned into chop and slop in the afternoon (see
chart).
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On Tuesday morning at 10 am ET, we have the
Consumer Confidence and Chicago PMI reports, with a consensus of 80.6 and 57.0
respectively.
How Do You Handle the Down
Time?
Intraday trading involves a lot of “down time”
during the day and I’ve received several emails asking how I handle it. When I
started doing this, I would be glued to my screens for 10 hours a day. I simply
can’t do that anymore, both physically and mentally. Physically, this business
can ruin your body if you let it, from the ergonomic hazards to straining your
eyesight. You must have outside interests to get your mind off the markets.
Sports, exercise, hobbies, meditation. I personally look at focusing on the
market for the first 2-1/2 hours up to noon ET, take off for 2 hours, and then
come back refreshed for the afternoon at 2 pm ET. >From a mental standpoint, it
clears my head to get away and do something else during lunchtime. Whether it
be working out, running errands, reading, playing with my dogs (I have 3),
taking my wife out to lunch, whatever. It also keeps me out of trouble by
avoiding the temptation to trade a timeframe that is susceptible to the most
mistakes and the least reward/risk.
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Please feel free to email me with any questions
you might have, and have a great trading day on Tuesday!
Chris Curran
chrisc@tradingmarkets.com