Sunday, November 11, 2012

3 push pattern

To clarify based on some questions I received, unless specified, all my point levels are based on ES, which is the tick of futures of S&P 500 (the tick is SPX). There are bunch of materials on the relationship between cash index and futures. The difference is mainly due to dividends and time value.
Here is my simplified explanation. ES futures are quarterly. At the beginning of the quarter, the current ES is about 5 points lower than SPX. During the quarter, the difference gets smaller. At the futures expiration, they equal to each other.

I guess I get what I am asking for. In last post, I showed my setup of the 3 push pattern and mentioned my target of ES 1365-70 ares.



Friday morning, the chart looked like this.

I was in a hurry. I didn't have chance to mark my chart, because I was buying the dip. I told 1 friend
I was not far off again. I exit ES longs at 1382.5 around 11:00 and happily took the rest of the day off. ES actually went to 1388, slightly higher than my mid-1380 target then head down to 1372.

My chart above actually tells my trading plan. I still have some calls. I think the recovery will take a while. I guess ES may test 1400 to confirm the break-down. That could be a good chance to exit long and go short again.

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