January was a good month for the bulls with a good finishIt is an inside month which increases breakout potential on both sidesAnything can happenWe have fed, tech earnings and nfp this weekExpect high volatility and multiple shakeouts on both sidesLeave fingers away from your positionsTrade intraday and take profits
Lets try to be as objective as possible On the big picture we broke the downtrend which dominated 2022 We try to establish an uptrend and were able to create a nice higher low On a day to day basis it looks a little more fragile but also ok We have the fed on wednesday We have the highlights of the q4 numbers with aapl, amzn, and googl on thursday after market close Expect a highly volatile week Get the size of longer term positions right and leave your fingers away from these positions. Do not get shaken in and out from the volatility Trade intraday Anything can happen the next weeksWe can roll over and go to new lowsWe can leave the lows behind and go in direction to alltime highsAnd door no 3: We can balance aroundStay objective. Do not listen to the media.
Pre market Post marketWe start strong without a fade One second after it looks like the sellers give up they come in strongThey sell it off hard, clearly below vwap and it looks like s stronger selling/liquidationBut we get no continuation: Instead buyers take over againInto the close we see a good amount of sellingFinally we end up with value clean higher
Pre market Post market Open with gap up on new swing high Sellers in control in the morningFrom midday on buyers take over controlThis market regularly gets too long. The consequent strategy is to wait until the inventory corrections are done. If we get a gap and go (which is rare) i am not on board.
Pre market We come in lower with msft earningsLets see if that covering structure on tf 1 holds or if they sell it off Post market Small fade, not able to close the gapPressure to downsideI am not interested in shorts. I wait if it failsNeed a few attempts but finally get the meat of the up-moveI see it as very bullish, that the market was able to absorp this negative event that way
Ambiguity of tradingThis is typical for the ambiguity of trading. On one timeframe the market looks ultra bullish and is a strong buy. But on the smaller timeframe the market has already moved a good amount in a short period of time on poor structure (single prints)As a pro active person i have more fear of missing out as of a loosing trade. In the past i often was too agressive in these situations and bought too high in relation to tf1.Combining two timeframesYou have to combine two time frames. I call the timeframe that i trade tf0. You can also call it daytype. In the hierarchy of timeframes i am a "daytrader". Below me are the "scalpers". Above me are the "short term traders". I call the timeframe above me tf1. The most important thing is what is happening live at the momentBut this you have to embed in what the timeframes above are doingSkipping a timeframe On tf1 we have a strong emotional move which happened in the last two days. Of course, anything can happen, but it would be normal if this at one time starts to balance out and create a covering-p-profile, This is exactly what i have to keep in mind to protect me from buying too agressive in the region of yesterdays high, even if the trade fits perfect in the actual day type tf0.This doesn´t mean that i am not allowed to buy there. But i have to carry this point forward and take it into account when deciding in the live-moment.It is easy to make the mistake of skipping a timeframe. If i say the market is trying to breakout from the balance area of the last 10 days i miss that it already moved strong for two days Do not skip a timeframetf0: Lets see what happens todaytf1: Emotional buying for two daystf2: Trying to break out of 10 day balance
Lets see what we get on top of yesterday trending day Remember that the market on the larger timeframes is trying to break the big 2022 down trend Gap up and small fade to y rth h and poc. Poc was on top, indicating that the auction is not finished Not able to go deeper in y range As an (sometimes too) pro-active trader i always buy the first failing down -move in these auctions Getting my max max targets easy with my "scale.-out-triangle" I tagged it as a trendday. But it is more a covering day or lets say something in between
We have third friday of the month = bigger options expiryThis can sometimes lead to pinning in single stocks which can make the index choppyOpen and test downFail and go trendday upOpen-test-drive trending day My rule no 1: See what is... not what should be
They start with a fade that gets no traction and is not able to fill the gapThe next auction is down and i am short in itGiven the potential to roll over in higher timeframes this is a nice tradeWe get no bigger follow through and consequently get a covering rally which also gets no bigger tractionWe end with a balanced day. Value clean lower. This confirms the short direction on this timeframe.
Market trading near swing highSuddenly with some fed-speaking they start to sellI tried a long at last weeks vpocBut they sold it off the whole day with a trending dayClassic buyers shut off, where one day of selling negates multiple green daysOne day doesn´t make a marke, but for now it looks like we roll over