Lately, the day’s low in the S&P 500 has been frequently put in at …sceeto’s blue line price magnet.
For more recent examples see here and here.
If you would like a free copy of our S&P 500 Price Magnets you can pick up a copy for NinjaTrader here and TradeStation here.
No registration is required.
Hope this helps.
The market used the release of the Retail Sales numbers at 8:30 a.m. EST to sell off.
In this chart you will notice that both MacDaddy and WIND (proprietary tape algos from …sceeto) showed consistent selling for more than two hours prior to the announcement…go figure.
This same effect happened 10 days ago on 04-FEB-12 at 8:30 a.m. EST, when the NFP (unemployment report) came out (see here) but in the other direction.
Hope this helps.
I think that algos run the market. I have thought this for awhile.
A lot of other people now think this.
I think that the algos are self-reinforcing, and have lemming like behavior.
I think that one algo can fire off another algo. The buy programs excite other buy programs.
Some smart, well resourced people, build algos just to take advantage of these phenomenon.
Maybe this recent attraction of the day’s low with the blue line has something to do with this.
Perhaps a bunch of algos have pin-pointed this price zone and are firing trades here…creating a more self-reinforcing environment. This is my best guess.
Here’s today’s action…
Prior day is are here and for more here.
Feel free to help yourself to a free copy of our S&P 500 Price Magnets for NinjaTrader or for TradeStation.
Hope this helps.
This is eerie…today marks the 5th trading day in a row that ES bottomed out on a blue horizontal line from …sceeto’s S&P 500 Price Magnets.
The prior 4 days screen-shots are here.
Feel free to help yourself to a free copy of our S&P 500 Price Magnets for NinjaTrader or for TradeStation.
Hope this helps.
T-Shirts, Socks, Gloves. When it comes to One Size Fits All it simply doesn’t work.
Same goes for trading systems.
Some folks are excited clickers, some folks have day jobs, some folks are comfortable when the market goes up, some folks prefer the short side.
A trader’s system has to fit their personality
And its not just the users of the systems that have different personalities, any given market has multiple personalities.
Thus, a trader’s system also has to be congruent with the market’s personality.
Sometimes the market is sleepy, sometimes it drank too much coffee and jumps around a lot, sometimes it decides to go for a nice long steady jog.
If you’re trying to trade a caffeinated, jumpy market, like it is a long steady jog market, you will be stopped out continually.
Thus, you either need to only trade your system when the market will play nice with your system, or you need a bunch of systems, each of which are appropriate for a particular market personality.
Part of our job here at …sceeto, is to help you determine what each day’s market personality is going to be so that you can more readily go along for the ride.
For instance, if market internals, as foraged by …sceeto’s WOW Index, WIND orMacDaddy, indicate that the market is likely to go up, then its important for a trader to know this basic fact so that they can begin to tailor the fit of their trading approach to the market that is front of them.
If a trader who is more comfortable going short than going long, wants to trade to the short side 5 days a week, he will likely experience a lot of pain during a bull market (and even during a bear market).
But if this ‘short only’ trader was tapped on the shoulder in the morning and given the message, “Hey, the market is likely to go up today”, he can opt to do something else that day with his time and capital.
There is very little risk to a trader who is parked on the sidelines holding only cash.
It is super to monitor the …sceeto algos during the pre-market and into the open at 9:30 EST, as they will frequently give you early readings on what the initial price moves for the day are. This is a critical distinction as you can now have an insightful preview to the day’s action.
To follow up on the release of …sceeto’s S&P 500 Price Magnets for NinjaTrader, which is a handy,and free, tool for traders that can help you quickly determine likely Support & Resistance based Price Targets, here are screen-shots of this week’s trading in the CME’s S&P 500 forward e-Mini contract.
You will note that during 4 out of 5 day’s this week (Tuesday – Friday), support was at a blue horizontal line.
This is not always the case, but it is an notable and interesting sequence.
Feel free to help yourself to a free copy of our S&P 500 Price Magnets for NinjaTrader or for TradeStation.
Hope this helps.
When decoding our information always remember that our approach is simply to align our trades with the trades that define supply and demand in the market.
If ‘they’ are buying, we should be thinking about buying….we should not be thinking about selling.
If ‘they’ are selling, we should be thinking about selling….we should not be thinking about buying.
The path of least resistance for price, and for those who want to simply enjoy the ride, is demarcated by a market’s Order Flow.
If you see lots of words on our charts that are green then you should be thinking about buying.
If you see lots of words on our charts that are red then you should be thinking about selling.
If a …sceeto chart is littered with red then all of the willpower and brilliant analysis will not turn the market around until the selling depletes itself and the buying commences in earnest.
The goal, imho, is not to nail the top or bottom, but rather to ride the trend with ease and grace and make steady income.
Here’s today’s …sceeto action in the forward S&P 500 e-Mini contract (09-FEB-12). Can you tell when you should be buying and when you should be selling?
Here’s yesterday’s…sceeto action in the forward S&P 500 e-Mini contract (08-FEB-12). Can you tell when you should be buying and when you should be selling?
Notice how both yesterday’s and today’s low was at the blue horizontal line.
We anticipate having a free version for NinjaTrader tomorrow.
We are wrapping up some changes and anticipate distributing our beta …sceeto for TradeStation this evening. If you are interested in being a beta tester, please feel free to drop us a note here.
Hope this helps.
Carl
The following are screenshots of yesterday’s action of smart automated trading in the S&P 500 e-Mini contract.
You can see that some folks knew when to get short, when to add to their profitable shorts, when to take profits, and when to turn around and take the elevator back up to the penthouse.
One thing to note is how our algo, MacDaddy, indicated that the Buy Programs were on in full force. The screaming takeaway from MacDaddy’s readings was to not short this puppy….or you will face the wrath of the machines.
If you are interested in a free beta version of …sceeto for TradeStation, which is the software that surfaced the above algorithmic insights, please drop us a note here.
Hope this helps.
Carl
I am big fan of James Altucher and find parallels between his life and mine.
We both went up and down in the software biz…though his kabloom was much more spectacular than mine.
We both went from living boisterous lives to living quiet lives.
We both get yoga.
We both maintain blogs (his is awesome).
We’re both involved in the trading industry.
What got me writing this post about Altucher was his blog post the other day about going to bed early. His post led me to experiment with going to sleep earlier.
Altucher starts winding down around 6:00 p.m. and generally falls asleep in the 8:00 p.m. zone, and wakes up between 4:30 a.m. and 6:00 a.m.
As I tend to stay up way late by Altucher’s standards, like 10:00 or 10:30, and feel like I can learn a lot from Altucher, I gave going to sleep a tad earlier a shot.
Last night I dropped off at 9:00 p.m. in a very comfortable bed in a hotel in NJ….and woke up at 3:00 a.m.
Buggers, I overshot it a bit.
I declined going to down going to the gym, and passed on ordering a $10 pot of cruddy coffee from room service, so instead hunkered down with a biography on Lincoln, which is pretty good and had previously inspired this post, “A Lincoln Quote | Out Of Context – But Still Apropos”, figuring that I would kill time until the Starbucks by my client opened at 6:00 a.m.
Well, I overshot that too as this Starbucks opens at 5:30 a.m. Sheesh, these barristers are committed.
What we are also overshooting is the beta launch of …sceeto for TradeStation. Our final …sceeto for TradeStation alpha build was signed off yesterday, but I stuck a caveat into the sign-off. Specifically, it was if we could jam one more algo into this release, then push it in.
The guidance that I gave the development team was that if squeezing this additional algo in would take too much time, then just push out the beta….and this is were we left it off at close of business yesterday…and this is probably why I am up at 3:00 a.m. waiting for the final beta release to come out of the oven.
Like a proud expectant father, I can only sit and wait while others do the heavy lifting.
If the compiled beta and installation wizard are completed today and pass an engineering sanity check, we will be notifying those currently on the …sceeto for TradeStation beta list that they can have at it.
If you are interested in becoming a beta tester either for ..sceeto for NinjaTrader or …sceeto for TradeStation, drop us a line here.
C
I have long been fascinated with the possibilities using order flow information to give insights into economic announcements and the market moves that they create.
Yesterday was NFP day and the market screamed through the bulk of its wondrous ascent in less than 1 minute.
This type of move may be too fast for humans to manage, but the time frame is eons for computers.
Yesterday’s NFP announcement offered a good example of the which way the bots were indicating the direction of the post announcement move.
In the example below, you can see that WIND (lower pane) was strong green throughout the pre-market, with just one dip around 7:15 a.m.
The WOW Index (Green & Red background in the price pane) was solid green for a half hour before the announcement.
Who knows what the headline number is going to be when it comes across the wire?
Well, I gather that there must be a core team of folks at BLS…and they are human.
Also, there must be some pretty smart PhD. Quants working at well funded trading shops who have their own econometric models that they work on in order to gain a statistical edge on the announcement.
There are probably other energies out there focusing on this number that I am not aware of.
What is likely, is that since the announcement of the Unemployment Rate usually moves the market, there are well funded resources being expended to game this move.
In order for these mystery forces to take advantage of the price move, they must place their bets in some sort of publicly traded exchange such as the NYSE or the CME’s GLOBEX.
Once these guys are trading out in the open they have to leave footprints….this is were we come into the picture…well, at least our software, …sceeto, comes into the picture.
We will soon be releasing …sceeto which should give you a leg up on the directional intent of insiders prior to significant market moves.
…sceeto has proprietary order flow algorithms that monitor this type of data….and it monitors lots it, in a very smart manner.
If you would like to be a beta tester for …sceeto, please feel free to reach out to us here.
If you would like a free copy of our S&P 500 Price Magnets for TradeStation you can help yourself here.
Thanks for stopping by.
Carl
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