Market Analysis – Nasdaq Futures

The Nasdaq futures (NQ) broke out of resistance at 4,441.50 but got promptly rejected at 4,450. That failed breakout look very bearish to me, and I think we could find ourselves going lower in the next few days.

NQ - 360 Minutes - 8 July 2015
NQ – 360 Minutes – 8 July 2015

Below us there is good looking demand at 4,205.75, which is where I’ll be starting to look for a long.

Looking at the weekly chart, with indicators courtesy of Emini-watch, you can see that we put in a pullback to end of trend, with a yellow amateur bar trying to get long at the top. The picture is quite bearish.

NQ - Weekly - 8 July 2015
NQ – Weekly – 8 July 2015


I currently have a short order placed at 4,401.75, from a small 2 minute zone.

Adding an OCO (Stop and Target) To An Existing Position In Interactive Brokers Trader Workstation

Most of my trading has been done on Tradestation, which still in my opinion has one of the best platforms out there as far as ease of use goes. When I switched to Interactive Brokers I found it quite an adjustment getting used to Trader Workstation – the IB platform. You can do most everything TS does in this platform, but it is all done a little differently so it takes some time to adjust.

One of the things I battled with was adding an OCO for a target and a stop for an existing position. What I usually do is get into a position with a limit order and a stop, and then add the target at a later stage. It’s not a good habit, and something I am changing. Having said that, if you find yourself in a position, wanting to add an OCO (order-cancels-order) for a profit target and a stop, here is how you do it.

  1. In the classic TWS, click on the contract/stock/forex pair that you want to place the order for. For this example, lets say that I am long one contract of ES at 2070.
  2. Press the order button in the top left hand corner.
    TWS Order Button
  3. Lets place the stop first. On the basic tab, we’ll make it at 2068, GTC and a stop order.
    Order Ticket Stop Basic
  4. This is the important part. Go to the Misc. tab, and give the order a group name. It must be unique per trade, so you can’t use the same group name all the time. This is the part that links the orders into groups. I’ve called mine “ES_OCO_LONG_01_01”. Press Transmit.Order Ticket Stop Misc
  5. Now click the Order button again and this time we’re going to do the target. We’ll set our target as a LMT sell order, GTC with a price of 2080.Order Ticket Target
  6. Now go the the Misc tab, and paste in (or type) the group name exactly as you did for the stop order. Mine is “ES_OCO_LONG_01_01”Order Ticket Target Misc
  7. Press Transmit and double check you’re order in your Activity Monitor and you’re all done.

It’s a lot more work than doing it in TS, but the result is the same and once you get used to it, it really isn’t all that bad. The only thing I wish you could do was place multiple target orders at the same time.

Interactive Brokers

Current Scan Criteria

These are my current scan criteria. As it stands this scan returns about 48 stocks, which are then used as the input for other scans. My main concern is with getting the most liquid stocks that move a little (Beta > 0.8). My main issue with liquidity is to ensure I get the best options spreads possible.

Scan - 23 February 2015
Scan – 23 February 2015

Quote Of The Day

When I’m bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don’t buy long stocks on a scale down, I buy on a scale up.

– Jesse Livermore

Quote Of The Day

“Since so much of the Japanese candle terminology is grounded on military terminology, we will look at stops in this context as well. Each trade you make is a battle –and you will have to do what even the greatest generals have to do: Make temporary, tactical retreats. A general’s goal is to preserve troops and munitions. Yours is to save capital and equanimity. Sometimes you must lose a few battles to win the war. The Japanese have a saying. “A hook’s well lost to catch a salmon”. If you are stopped out think of it as you would a lost hook. Maybe you will catch your prize with the next hook.”

– Steve Nison

Chart Analysis – $TWTR

Much brouhaha about the Twitter rally in the past few days has got me watching the chart quite closely. It is still in a downtrend, so I’m looking at this strength as an opportunity to get short the name. The only issue that concerns me is the chatter about Carl Icahn, though chatter is chatter and not a trade plan.

TWTR - Weekly - 8 January 2015
TWTR – Weekly – 8 January 2015

Looking at the weekly chart above, it is clear that there is definite supply from 41.27 – 43.94, and that the market is in a downtrend, making lower highs. I’ll be looking to get short into that – probably sometime next week I’d imagine. My stop is above the zone and I’ll be looking for it to print below 30. There really hasn’t been a “blow-off selloff” in this stock, so I am waiting for that before I consider getting long.

Chart Analysis – $CMG

$CMG (Chipotle Mexican Grill) is looking fairly bearish to me. Looking at the weekly, it is really struggling up here after trying on many different occasions to continue the uptrend, but each time it just makes a lower high.

CMG - Weekly - 3 December 2014
CMG – Weekly – 3 December 2014

On the chart above I only see demand at 508, making this a great risk-to-reward trade. On the daily though. there is some demand at 595 that the bears need to push through.

I am looking at the 30 minute chart for zones to sell the rallies and I like the supply on top of supply at 669, then at 673.

CMG - 30 Minute - 3 December 2014
CMG – 30 Minute – 3 December 2014

All in all a bearish looking chart, showing relative weakness to the market with some nice supply above. A good looking setup, with extra guacamole on the side.

Trade Idea – $YM_F Short

I don’t often trade the Dow, but there is a nice little rally-base-drop on the 60 minute chart that I like a lot. I’m basically looking to get short at 17,856, with a stop above 17,877 and four targets, as posted on the chart.

YM - 60 Minute - 1 December 2014
YM – 60 Minute – 1 December 2014

On the daily chart we have nice demand at 17,308 where I will look to reverse. If only trading were that simple…