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Week 4


quote:
This is the fourth weekly installment of my CL/CES journal I outlined in The Intro. Previous weeks:
Week 1
Week 2
Week 3

The course is based on material provided by DLC Profiles, as well as Jim's texts on Market Profile, MoM and MiP. Anyone needing more information should fill out this form and schedule some time with DLC to get a deeper overview of the course.

On with the journal ...
CL/CES - Week 4

This week i am changing up the format a bit on my weekly entry. First, i'm moving away from detailed daily notes (within my posts anyway), but I will still split content into specific sections, like EOD Notes and Trading Notes; it'll just be more summarized.

last week, i grew a little concerned with the timeliness of my entries (i.e. timestamps and so forth), because i didn't want to put something on here that looks like you could just go throgh the charts on Saturday and reverse engineer the week. i hope that isn't the perception, but i decided not to devote time to prevent it. i take a lot of notes every day, real-time, during the session, and many times i am referencing specific material from the course. so at the end of the week i go through all my personal entries and basically create my own weekly summary report - and that's what i end up posting here. i also feel compelled to remind everyone, myself included, that this was never intended to be any type of trade-calling endeavor. it's a journal intended to provide a glimpse into my particular trading education, which, for anyone who hasn't tried it, can have very conflicting objectives. but, to be completely honest, i am having a blast with this whole pursuit - the course, the journal, the forum, the learning, the all-of-it.

and, finally, i offer my sincere thanks to all who have shared positive comments and feedback. i'm thrilled to have the oppurtunity to be involved with this experiement and i think we have only just begun ...

I'll post the meat of this week's journal shortly.
Monday, 02/02/2009
Pre-market
steady selling in the overnight and we should gap down pretty hard at the open. inventory is starting the day predominately short - look for the possibility to bring that overnight (ON) inventory back into balance. as it stands, we are a ways from unchanged value, but still above our 800-880 bracket bottom. overhead price levels to note: 813.50 (ON), 818.50 (ON), 822.50-823.25 (ON and VAL), 825.75 previous day close (PDC), 830 (POC).

EOD Notes
After probing down a bit from the open, we barely breached 810 and never touched overnight lows (ONL), forming a 13-pt IB that was capped to the upside by Friday's N-period low. With that info, it's looking technical or mechanical. Eventually we did get range extension up (REU), but then that up move fizzled a couple points above PDC, within a point of overnight highs (ONH), and just shy of the L-period high from Friday. more technical movement. we sold off pretty hard from the highs, but the 813.50 area (which was just above B-period low and today's open) shut off selling. we went back up, 1-ticked the high, and sold off again, finally landing right around the IBH. the A-period buying tail stayed intact. we never got back to unchanged (or even overlapping), but we did regain some value. one of the lowest volumes in 14 sessions (bottom 20% over 25 sessions). no wonder it was flapping in the wind.

Trading Notes
i was trying to put something together to get long off the breakout of the A-period high, but ended up playing the role of RFAT ('richard' for a tick), so no go. with a wide IB, i looked at shorting around IBH, but with VAL sitting just above and this looking so technical, i opted to hold off and try for a little better pricing. was damn near RFAT again. i stepped in front of VAL by a couple of ticks and was shorting near the HOD at 823. very nice. barely dipped back into IB and started running up. scratched and flat. still looking technical, i was looking for the gap fill and that to be the next shorting opportunity. i wasn't thinking about all that O/N short inventory still on hand. i let the gap fill and took the short 1-tick above PDC. i didn't take much heat, but i ended up sweating it with that ONH looming above. if this thing stayed technical, it would be easy to see them aim for the ONH, clear out that short inventory, and essentially be starting the day at zero; in the day timeframe, i would have had no real footing then. it didn't take much me to take my gains and bail. and watch it follow through. that's okay, because even though i was on the right side, i got there for the wrong reason. when we broke back into the IB, i figured we'd start trying to test that A-period tail, so i looked for a short. I got it with a M-period short at IBH. and i took a loss. it was small, because we just seemed to be all over the place; as technical as it was, nothing seemed to stand out as the way to go. still away from unchanged, i kept an eye out for another short. as fast as we sold off the highs in G-period, i took a stab at a late afternoon short when we got there again in M-period. this time i felt i was on the right side at the right time for the right reason. except i can't stand late day trades.

Homework
Technical levels - even though i noted some levels pre-market and felt we were in a technical market today, i could not seem to get my groove going until late in the day, and that's my second least favorite time to trade (lunch being first). i don't have to stick like glue to levels, but maybe take a broader look at what the levels are and frame them in a more useful context as the day unfolds.
New business vs. Old business - is it new longs buying or old shorts covering? is it new shorts selling or old longs liquidating? or both?

Tuesday, 02/03/2009
Pre-market
** internet/router/data feed issues so i had nothing until about 11am Central **

EOD Notes
ON was all over the place, but we did end up a little bit net long coming into the open. we 1-ticked yesterday's H-period low for our IBL and couple-ticked the M-period high for our IBH. suh-lightly technical. we had a nice head-fake with REU in D-period and eventually chewed our way down to VAH. definitely not impossible, but getting to unchanged value was going to take work by the time we hit VAH. we chewed our way back up, but this time those D-period highs failed and we had true REU. the D-period high ended up serving as the shut-off valve for selling for the remainder of the day. volume still junk, but a little higher. maybe something is quietly building (up?).

Trading Notes
i took a long off the VAH area. a bunch of levels were sitting there, and, while it seemed neither was decisive, selling seemed to struggle just a little more than buying. it took a while for that trade to do anything and i ended up bailing with a few points; i exited because the trade wasn't leaving me all warm and fuzzy, not because anything market-related was screaming at me to get out. i was not on the J-period ascent, but did get long when we retested the D-period breakout high. low heat and decent movement.

Homework
Technical levels - while i felt more aware today than yesterday, i still felt underinformed. and starting off the day with 2.5-hrs of visual silence did not put me where i needed to be.
Self - i never stepped back enough to look at my situation outside myself. no data was not as big a deal as it was for me to be frustrated and feeling like i was playing catch up when things did get back online. next time, i think a better option would be to step back after i get things back up and running, breathe, do my normal pre-work, and see where things are.

Wednesday, 02/04/2009
Pre-market
another topsy-turvy overnight session, but we will be gapping up at the open. a decent chunk of this upside gap took place in the hour preceding RTH open, so it may have some adhesion to it. below us, we have 831.50 (gap fill), 829.50ish (yesterday's D-period breakout), 825.50 (POC and recent close), and 821-ish (H-period low, PDO, and VAL all nestled around there). above us is the 840 (PDH and recent level) and 850 (frequently a head-bumper). keep in mind that unchanged is not out of reach; it will take work from this open, but it is reachable.

EOD Notes
** EOD is that i felt like crap. i wasn't feeling so hot at the open and just deteriorated as the day dragged on **
we probed down to the N-period high, but that probe served as an A-period buying tail for quite a while. we built a solid 13-ish point IB, peeked above it and sold off (rotating down a bracket at a time until I-period). I- through N-period formed the inverse of A- through H-period, leaving singles just below IBL. price ended down, we build acceptance down, but the POC and VA actually closed higher. again, volume was low, but perked up a little from yesterday.

Trading Notes

not much going on here. i let the IBH and that fat-ass 850 level shut down any buying and go short. the only other thing i was trying to do was get short the IBL once we blasted through it, but i RFAT'ed it. i was in no mood to mess with this stuff; if it came to me, so be it.

Homework
Self - get unsick

Thursday, 02/05/2009
Pre-market
** sicker **
we're still pretty balanced over the last four sessions. we've been making little newer highs and scooting up the volume, but it's still low volume in recent context. we are going to gap down at the open, right around VAH (822-ish) from the 3rd. the ONL isn't too far down either. below that is 817-ish (LOD from the 3rd), the 813 area, and then the 808 area. above is the 825, 830.50 (ONH, recent POC, and gap fill all nested around there), 835-ish (recent VAH), 840, and 850.

EOD Notes
** sicker **
well, today we got to see some things. first, volume. damn near into the top 25% over the last 25 sessions and highest in ten sessions. second, we saw yesterday's late acceptance get eaten up with buyers. we had an eh IB (a shade under 10-pts), but C-period just rolled right on up into that I-period selling spree from yesterday. and what were we working towards? UNCHANGED!!
yes, that bloated 850 squashed yet another up move, but value got back to value. so the last three days are pretty well balanced. really, the last five days. interested to see what tomorrow brings.

Trading Notes
i shorted the 834 area as it was into VAL a bit, yesterday's K-period high, and yesterday's IBL. no one stopped to ask me for directions - they just went up. so when it came back down, that's where i got long. that trade had a happier ending. and that's all i could muster. i was done in every way.

Homework
Self - complete last night's unfinished assignment ... get unsick!!

Friday, 02/06/2009
Pre-market
** less sick **
ON was relatively tame ... until the last two pre-market brackets. so we will likely gap up a few points at the open. above us, we have the 848 (ON highs), 850 fattie, 861-63 has some historical up-squashing oomph, and 874-76 is a heavy. below, is the same stuff listed yesterday. and, is it just me or did those last two O/N brackets traverse the range from yesterday's K- through N-periods? that seems very mechanical. keep in mind it is Friday - nobody likes to be up all week and squander it right before the weekend.

EOD Notes
well, shape wise and direction, we looked very similar to C- through N-period yesterday. we did gap up, probed down a bit towards filling the gap, then it was onwards and upwards ... the A-train was on the move. and we blew through that fat-ass 850 level. like it was nothing. that thing had squashed several moves and today it barely whimpered. in fact, the 847.50 - 853.00 was a volume void today. we formed a big IB, and once we were a few points above that 850 level, we never tested lower. when we got REU in D-period (C-period couple-ticked it, but that wasn't anything), getting back to unchanged was going to be a challenge. and it was a challenge that was not met. we had a second breakout at the top of the D/E/F/G brackets, but were never able to pull up the POC higher than 858.50 (VAL was at 857.00). so we finished decisively up, value up, POC up, and near an extreme close for the day. volume was 2nd highest for the week, but barely above 50% over 25 sessions. given the force of the move, it seemed like this was a longer timeframe move, especially the way 850 folded.

Trading Notes
well, sadly, i was not on the A-train. happily, i was also not underneath it. i was looking for longs. i took a long off the E-period low for a little bit of heat and a little bit of gain. and i did the same thing in G-period (off the E-period low). i let go of that one as we approached the D/E/F/G tops. yes, prior to the breakout. no chasing. i did try a long off the H-period breakout level later on, but ended that for a small loss. final trade was shorting the K-period top. in hindsight, i wouldn't have taken that one again. even though it was right-minded (twice failing to breakthrough that I/K top and no surge of buying), i know that on days like today, an extreme close is probable. i think it was an asymmetric risk and not in my favor.

Homework
Self - get rest and get as close to 100% as possible for Monday. hell, get that way for tomorrow morning.
Timeframes - i think i can often tell when the long timeframe players are not active, but am less clear on others. especially short-term and intermediates.
well, as I collected my notes and put it all together, something stands out as a common theme: current left-brain dependence. i see glimpses and glimmers of right-brain intervention, sometimes even some whole-brain synthesis, but a bunch of my notes and intraday thoughts are quantifiable, measurable, analytical data points. and that's okay. i know i am in a context establishment phase right now.

this is a journal note for myself, but also a helpful reminder to any discretionary trader, regardless of strategy or methodology: keep it in context. i know we will revisit this often, but, for now, i'm just putting it out there to keep things in context. let the data derive importance (or not) from context and perspective, not the other way around.