End of Day Journal (7-9-2010)

Summary:

Another day spent watching the markets unfold. Primarily this consisted of the TICK, TICKQ, and the Q's. I charted the 5 minute and then the 1 minute Ticks against the 5 minute Q. I made notes on the 5 minute version throughout the day:

Yes  - a lot of stuff on the charts. The advantage that I see with the one minute Ticks is that it is much easier to see overall market sentiment. For example, just looking at the 5 minute today, the fact that the market was bullish for most of the day is not quite so easy to pick out - the 5 minute candle dips, perhaps shooting right back up, but for the casual observer, it could have been negative for most of the 5 minutes, without him/her ever being the wiser. The one minute is more reflective of where all the action is.

It is a little hard to tell on the chart above as I was trying to squeeze the entire day in, so here is a condensed version:

(On all of these, the navy blue line marks the '0'; the lighter blue line marks the 'average' levels; 600 and -600 on the TICK, and 400 and -400 on the TICKQ. The 600 level is more or less supported from various internet sources; I threw the 400 line on the TICKQs yesterday just because it looked about right.)

The Ticks rarely got down to the average low level at all today, and you can see in the 1 minute, that they did not hang around negative much at all.

Interestingly, a mixed bag on the signals. Some of the extremes or new high/lows presented good fade opportunities - in fact nearly all did if you were very quick, but it would have been tough betting against the bulls.

Also - All the bullish side action lends a lot of support to the 11:55 market breakthru.

Another thing I did today was record the buy/sell volume on several stocks. I had one chart set up especially for the Q's:

I got in a little late on this chart, hence no buy/sell until 8. It is clear to see that the trade at ask volume far outweighs the trade at bid volume - very bullish. This may offer some indication of when to get out of a trade.

Interestingly enough, the buy/sell volume showed some interesting action later in the day. I just took snapshots for later review:

Of interest here are the far right candles - notice how many trades are filling at ask, the first two are of the same candle, the next two are of a candle ten minutes later, and the last is end of day. Strong buying, but the Q's dropped like a rock; it didn't keep up though.

Based on that sequence, the buy/sell volume looks like a strong indicator. However, I recorded several additional stocks as well, and kind of a mixed bag. I will post BP first - Scott traded it and I marked his entries. You can judge for yourself, but I am reading bullish on the buy/sell volume on BP for most of the day; it does start evening out when Scott shorts, but I am not sure that I would of read it well enough to call it - perhaps with the doji at the top printing. That might be key - buy/sell volume within candle context.

(Of course, Scott just nailed it.)

I actually tried a little experiment - limiting the view to only the buy/sell volume, I tried to determine what the price was doing (as checked by the candles): bullish or bearish sentiment. I got surprisingly close on all of these. I may post these over the weekend.

Well - I am feeling braver. I think this has been a healthy exercise - watching and trying to learn from the market without even paper trading; it puts me in a completely different place mentally: pure focus. I wonder if this is where I should be while I am actually trading? I think so.

The plan is to do this another day; then I am scheduled for a paper trading conference - going to spend half the morning comparing observations with Eric on Tuesday. I hadn't been doing the affirmations - strange how quickly it can come to seem routine and mundane. I picked them up again today and plan on keeping at it. I think the affirmations probably play a much larger role than I ever acknowledged.

Have a great weekend.