Tuesday, January 04, 2005 8:24:58 PM
The X-Peculator Call [05/01/2005] - NDX
Hello Guys, this is a copy of my partner (X-Peculator) Trading Plan for Tomorrow.
Hope you enjoy this
Jesse Livermore
****************************
Captain Z: Hello general X-Peculator, how was your day in the markets today?
The X-Peculator: I just stood still, letting the profits run. The NDX opened higher after a big red candle, because traders were expecting a high number for factory orders. That indeed happened and the market sold off on the good news, as it is supposed to do on a market top.
Captain Z: So you just watched the markets fall, holding on to your short position at 1624 (NDX futures). Why didn't you take profits today?
The X-Peculator: Because there is no motive to take profits. The next support level, where I expect a reaction, is almost 30 points below where we are now.
Captain Z: Ok. Do you think this is the start of something big?
The X-Peculator: Well, I left the business of forecasting the market a long time ago. Now I just respect the trend and go with it. But, since you ask, on my recent research I found some valid arguments for a declining phase that could last months.
Captain Z: Like what?
The X-Peculator: To be concise: watch the COT - commercial hedgers are getting short in a big way. The USD Index seems to have bottomed, but not for the reasons the public and the media is stating: the market didn't suddenly got convinced that the US economy is growing fast, what I believe is true is that finally investors have come to the conclusion that the rest of the world (meaning Europe and Japan) isn't able to change it's economic model, from an export-led economy to an internal demand economy. The fall of the USD was the main reason the stock market was rising, it was a currency thing, I believe.
Captain Z: Ok, but you certainly don't want to get too attached to that view, do you?
The X-Peculator: No, I don't. I have other bearish arguments, but that won't make me any money. Let's go to the trading plan for tomorrow?
Captain Z: Yeah !
TRADING PLAN
The Technical Charts for this Plan:
http://x-peculator.com/nasdaq_futures_board/viewtopic.php?t=19
As we can see in the chart the market now has made two big red candles, which definitely is bearish market action. If it is bearish, The X-Peculator must continue to be short (from 1616 on the cash index, as stated in the prior analysis). My short term target for this move is the ascending trend line that tomorrow will stand at 1542.84. If this target is reached tomorrow I will close the short and enter long, just for a quick 5 point gain, I wouldn't dare to risk more than that. Let's see a longer time frame chart to know where this trend line comes from:
I would put a 5 point stop loss (and profit) at that long trade.
If the market doesn't reach the target and starts climbing I will get out of my short position with a profit. This strategy is called the use of a trailing stop order. I will exit my short position if the market crosses trough the midpoint of yesterday's red candle, which stands at 1591.5 (if the market stays more than 1/2 hour above this level I will close short, if not maintain until target at 1542.84)
The X-Peculator
http://www.x-peculator.com
******************************
Hello Guys, this is a copy of my partner (X-Peculator) Trading Plan for Tomorrow.
Hope you enjoy this
Jesse Livermore
****************************
Captain Z: Hello general X-Peculator, how was your day in the markets today?
The X-Peculator: I just stood still, letting the profits run. The NDX opened higher after a big red candle, because traders were expecting a high number for factory orders. That indeed happened and the market sold off on the good news, as it is supposed to do on a market top.
Captain Z: So you just watched the markets fall, holding on to your short position at 1624 (NDX futures). Why didn't you take profits today?
The X-Peculator: Because there is no motive to take profits. The next support level, where I expect a reaction, is almost 30 points below where we are now.
Captain Z: Ok. Do you think this is the start of something big?
The X-Peculator: Well, I left the business of forecasting the market a long time ago. Now I just respect the trend and go with it. But, since you ask, on my recent research I found some valid arguments for a declining phase that could last months.
Captain Z: Like what?
The X-Peculator: To be concise: watch the COT - commercial hedgers are getting short in a big way. The USD Index seems to have bottomed, but not for the reasons the public and the media is stating: the market didn't suddenly got convinced that the US economy is growing fast, what I believe is true is that finally investors have come to the conclusion that the rest of the world (meaning Europe and Japan) isn't able to change it's economic model, from an export-led economy to an internal demand economy. The fall of the USD was the main reason the stock market was rising, it was a currency thing, I believe.
Captain Z: Ok, but you certainly don't want to get too attached to that view, do you?
The X-Peculator: No, I don't. I have other bearish arguments, but that won't make me any money. Let's go to the trading plan for tomorrow?
Captain Z: Yeah !
TRADING PLAN
The Technical Charts for this Plan:
http://x-peculator.com/nasdaq_futures_board/viewtopic.php?t=19
As we can see in the chart the market now has made two big red candles, which definitely is bearish market action. If it is bearish, The X-Peculator must continue to be short (from 1616 on the cash index, as stated in the prior analysis). My short term target for this move is the ascending trend line that tomorrow will stand at 1542.84. If this target is reached tomorrow I will close the short and enter long, just for a quick 5 point gain, I wouldn't dare to risk more than that. Let's see a longer time frame chart to know where this trend line comes from:
I would put a 5 point stop loss (and profit) at that long trade.
If the market doesn't reach the target and starts climbing I will get out of my short position with a profit. This strategy is called the use of a trailing stop order. I will exit my short position if the market crosses trough the midpoint of yesterday's red candle, which stands at 1591.5 (if the market stays more than 1/2 hour above this level I will close short, if not maintain until target at 1542.84)
The X-Peculator
http://www.x-peculator.com
******************************
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