Day-trading the trend in the E-Mini S&P

January 29, 2012 06:00 PM
Market Pulse: Jan 30, 2012

Last week the March 2012 E-Mini S&P opened at 1307.50 and closed the week at 1312.50. That is 37.75 points higher than the Jan. 3 open of 1274.75.

Looking at the five-minute chart below you can see that if you were trading since 2:00 a.m. there were three very nice intra-day technical trade signals. You can see the short technical signal between 2:00-3:00 a.m., another short technical signal came five minutes after 6:00 a.m. and the first long technical signal came in between 9:00-10:00 a.m. You can see that this methodology, when used correctly, can be very profitable. It has been said that if you trade less, you will make more. Keep in mind that this takes extreme patience and discipline, something day-traders usually were never trained to develop. Please feel free to back test this all you want.

On the daily chart below you can see the technical trade signal on Dec. 22. Currently, ADX at 44 shows a strong trend with 1320 an area we would want to see a break over to confirm the trend will continue. As of today, MACD has dropped all divergence and is now crossing below the signal line and Stochastics are correcting from overbought territory. Today’s weakness in the market is being caused by the uncertainty once again in Europe. Take a look at the five-minute chart again to see the early 9:00 a.m. low at 1296. You can see the market is up from there.

So go ahead and back test the above methodology. I think you will be pleasantly surprised — if, of course, you have the patience and discipline.

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