Stock market XMI high and close just above 1172, my stop level. However, cash DJI did not exceed yesterday's peak. Sometimes, before a decline, the market will run up to clean out the shorts just before turning down.
I will look for DJ March futures to exceed yesterday's high by 20 points. Yesterday's high was 10606 and currently at 10605.
Let me explain why I don't wait for confirmation before I enter my intial positions. The following is SPX cash 15-minute 54-unit M/A. Last Friday at the close was the sell signal via I1. Notice the gap between price and M/A. By giving an additional .56% beyond the M/A the difference between market and the flash point is Friday close - M/A - 6.4 = 1141 - 1128 - 6.4 = 19.4 S&P points that I would forego had I not established a small initial position.
At the close today my stock shorts were 15% of capital, leaving plenty of room for the follow-on position(s) on break of support. In the 2:30 post I discussed the compression around the 54-unit M/A and I did exit the SDS that I put on at entry of 32.40 and exit of 32.35, at DJI 10,580 which was the upper end of the channel, which I have discussed all day. This left me with 15% exposure. Now the DJI and XMI are still trapped within their trading ranges until DJI exceeds it's old high in the cash market by .15% (this has worked for me many times in the past and I have avoided being stopped out for trivial insurance). The futures markets are a bit friskier so I allow .20% beyond old highs/lows. Thus I will sell any DJ March futures high beyond 10,626.
today is no surprise. they ramped the market off the Fed Flow of Funds data. the market jumped at 3PM EST, exactly when the report was released.
ReplyDeletei am concerned about over night manipulation in the futures market because we all know how many stops are on the other side of 1150 (including mine).
-erik
I much prefer using cash markets for stops. Futures are thinner overnight and allow for runs against stops. I always allow at least .15% in cash DJI then even 20 may not be enough to prevent it. But we must draw a line in the sand somewhere. I was set to pull the trigger at XMI 1172 even until I noticed the DJI hanging back. XMI never made it to 1173. Thanks for the comment.
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