Daily PM Prep - May, 10


** Preparation for Closing Session **

MARKET CONDITIONS



SPY - Market is providing a very clean read. After failing to break up and breaking the shorter 5 minute channel, the expected correction is coming. This correction is likely to find support at 160.50 cause it is a confluence zone. If gets there, watch to see how price behaves. Since it is Friday, not much is expected for this afternoon. As long it is respecting the up channel, the bias overall is bullish.
Bias: Neutral with a correction (overall bullish)
Accuracy: 

PM Stock Selection Sheet download
Updated at 13:00

Want more information about the Stock Selection Sheet?
Legends - Click me
Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk. 2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The afternoon sheet will be updated between 13:00 and 14:00
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Daily AM Prep - May, 10


** Preparation for Morning Session**

MARKET CONDITIONS

World Markets News: Asian markets finished broadly higher today with shares in Japan leading the region.European markets are higher today with shares in France leading the region. Germany is also up, confirming the good expectation.Fed Chairman Bernanke speaks at 9:30, right on the open. This may increase volatility.

Economic Calendar



SPY - Still in trend mode, but showing signs that it is tired from going up and needs to rest. Yesterday we tested the base of the shorter up channel, but did not break below it. In case of a correction the 160.50 is now the confluence zone we expect the market to hold. World markets are green and despite the fact a correction is expected, the overall market is strong. The only thing that would change our bias is if the base of the longer channel was broken down, but prices are far from there.
Bias: Bullish to Neutral
Accuracy: 100%

AM Stock Selection Sheet download - not much pre-market volume, but there are good trading opportunities.
Updated at 8:20

Want more information about the Stock Selection Sheet?
Legends - Click me
Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00
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Trade Review - RAX - May, 09


Stock Selection Information


Mid-Morning Market Update: Tesla Soars on Earnings as LivePerson Gets Crushed
Morning Market Losers
UPDATE: FBN Securities Downgrades Rackspace to Underperform Following FQ1 Miss, Lower FQ2 Guidance




Watch List Reason - Earning released yesterday after market closed
Pre-Market Volume - 10%
Trading Plan - Strong  support @ 41.00. It fail to hold above this level after testing it, so my plan change to short it.

Management

Entry Setup used: Open range break down

Trading Comments

Stock made a strong move down on earnings and consolidated yesterday. Today during pre-market it consolidates below yesterday´s range. After the open again it consolidated below the pre-market range. So I shorted when I saw a strong seller coming in around 40.25

Evaluation

It was a very well executed trade. I could´ve held it longer, but it was before 10:00 and my target was the projection of the range down for a .50 move. When it hit my target I got out. I was risking .07 cents to make .50. this is a very good risk / reward trade.
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Daily PM Prep - May, 09

** Preparation for Closing Session **

MARKET CONDITIONS


SPY - Market is still in trend up mode and still respecting the 5 minute channel. I do not see it change too much today. Still expect this smaller channel to break down into some profit taking, maybe in the afternoon or tomorrow. This would be healthy to the market. The 161.25 zone should provide support for this move. The only bearish sign is a break down of the longer term channel. There is one scenario that I should have in the back of my mind: strong bullish sign if we break up the longer term channel. Lot´s of volume would be necessary.
Bias: Neutral Bullish
Accuracy: 100%

PM Stock Selection Sheet download - there are some good stocks to trade from in the afternoon.
Updated at 13:30

Want more information about the Stock Selection Sheet?
Legends - Click me
Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk. 2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The afternoon sheet will be updated between 13:00 and 14:00
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Trader Tools - Trading Journal - Routine

My Trading Routine Sheet is the first journal I will talk about. This is the track of tasks I have to execute during my trading day. What are the tasks that should be in there? All of them. It can not be explained in a more simple way.

One of a trader´s goal is to be consistent and it will be hard to achieve that if you do not repeat the things you did today, tomorrow. By doing the tasks you plan to do, you will be more focused and it is unlikely to forget to do something.

Here are some of the reasons why it helps to have a Routine Sheet:

  • Build confidence - there will be times you will not be confident in yourself. By following your routine it will be easier to regain that confidence. I just came back from a trip with my family a couple days ago. My goal for this week was to just follow my routine and get back in sync with the market. You would be amazed how this simple gesture helps your confidence in trading comes back.
  • Feel prepared for the trading day - after I have completed the tasks I planned for my preparation before the open, I feel ready to trade. If you feel prepared and confident it is more likely that you pull the trigger when you have to get in and out of positions. 
  • Trading feels more like a job - by working at home, you can sometimes feel that trading is not a job. Your mind can play tricks on you, and if you believe it is not a job, your mind will make it true and it will not allow you to be successful at it. With the routine sheet, by the end of the day, with the sheet completed you will have that sensation of "job done", regardless if you were profitable or not.
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Daily AM Prep - May, 09


** Preparation for Morning Session**

MARKET CONDITIONS

World Markets News: Asian markets finished lower today with shares in Japan leading the region.European markets are mixed to lower. It is a holiday in Norway, Switzerland and Indonesia.Interest Rate Decision in Great Britain and Initial Jobless Claims to be released in US before market opens.

Economic Calendar



SPY - Market is still trending up after the range break. It is unlikely that this is a fail break at this point. Market is respecting a channel up in the 5 minute chart that most likely will be broken today. After a couple days up, some profit taking would be healthy. The 161.25 zone (as a confluence of supports) should work as a support for this correction and must watch how market behaves around this area. If we respect the 5 minute channel slow up move may take place. The break of the 60 minute channel down is the only bearish sign to watch for.
Bias: Neutral Bullish
Accuracy: 85%

AM Stock Selection Sheet download - a lot of good stocks to trade today. Choose the best ones and stick to them.

Updated at 7:30

Want more information about the Stock Selection Sheet?
Legends - Click me
Read this before using the information provided in this page:
1.Educational purpose material only. Use this information at your own risk.2.Stocks may be added to the selection sheet at any time. They are used as a guide to select which stocks I will trade and set alerts . It does not mean that I follow all of them, that would be crazy.3.The Accuracy information is for my own use only. It is reviewed after I am done trading. This is just a way for me to measure how is my reading of the market and my confidence in it. I suggest you develop your own way to do this.4.The morning sheet will be updated between 8:00 and 9:00
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Trader Tools - Trading Journal - Tools

One of the first things a trader should have is a trading journal. You probably heard that one before, but when I started I had no idea what should I have in my trading journal. I searched around and could never find a precise answer of what a should be in this journal. The true answer is that you must find, based on your trading style, what is the information that helps YOU the most and create your journal based on this. The next series of articles I will explain what is the type of journals I have and how to use the information in it. Hopefully this will help you figure out how to create your own journal.

There may be some tools out there that could help you, but I try to keep things simple. As an Excel addict I have most of my journals in Excel´s sheet. Just because I find it easier to work with and to take information from it. The other tool I have is this blog, that helps me record the market information and trading ideas on a daily basis.

So here is how my journals are structure:

  • Trader Routine - Excel Sheet - it contains step-by-step what are the activities I must execute every day to be able to trade. It is just a check list.
  • Trader Journal - Excel Sheet - This is my psychology journal, the most important one for me and the one the consumes most of my time (you will see why)
  • Trading Account - Excel Sheet - This is to keep track of my Profits and Losses during the day. 
  • Trading Statistics - Excel Sheet - This is where I keep the record of all my trades. Entries, exits
  • Trading Review - Blog - this is where I review my best (or worst) trades. The idea here is learn from my mistakes, identify market changes and to think about trading. How can it be improved.
  • Market Conditions & Trading Ideas - Blog - This is where I evaluate the overall market conditions and record my trading preparation / trading ideas for the day.
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