[ Pobierz całość w formacie PDF ]
.If bad newsis not bad enough to pull prices down to a new low, prices are likely goingup.Therefore, I see it as an early buying chance.The reverse is also true.If the good news is not good enough to merit a major play by the bulls,I sell.As confirmation that my analysis is correct, I check the E-mini andthe Dax.The Dax is probably moving up in price while the E-mini S&P istrying to test the lows.When the S&P cannot break through those lows, itchanges direction and I make money.Figure 7.1 is a chart of the E-mini S&P futures that depicts this trade.On May 17, 2007, the Globex high on the E-mini was 1518.News was re-leased and prices tried to move up above the high but could not do so.Fig-ure 7.1 shows the market s response when the bulls were unable to moveabove the highs.A market that cannot go up generally goes down, and thatis what happened on May 17, 2007.Another strategy for trading the 7:30 AM news is to gauge prices beforethe news breaks as outlined above.That is, look at the Dax 6:00 AM priceand use it as a benchmark.Also note prices in the S&P, Nasdaq, and Dowto determine if those indexes are trading near their highs or lows.If thebulls or the bears are able to reach a new high or a new low, wait for pricesto settle and retrace.It is highly likely that after a few minutes they willdo so.If there is a strong sentiment in a particular direction, the move willbe repeated and you will have a chance to buy or sell on the confirmationmove.So, buy or sell on the second pass above the new low or new high.As the chart in Figure 7.2 shows, this was a good play on May 11,2007.The second upward pass on the E-mini S&P was a great play for daytraders.P1: JYSc07 JWBT016-Busby October 1, 2008 21:9 Printer: TBDNews Pays 91FIGURE 7.1 A 30-minute chart of the E-mini on May 17, 2007.At DTI, we regularly trade news.On May 2, 2008, employment newswas released.The employment situation data was predicted to be bleak.However, when the news was reported, the numbers were far better thananalysts had hoped.Anytime there is a significant deviation from the pre-dicted numbers, the market reacts.On this day there was a big move up andFIGURE 7.2 A 30-minute E-mini S&P chart for May 11, 2007.P1: JYSc07 JWBT016-Busby October 1, 2008 21:9 Printer: TBD92 STRATEGIES TO WINFIGURE 7.3 A 30-minute chart of the E-mini S&P 500 futures shows the newsbreak.Because this is an after-hours time frame, the data recorded begins on May 1,2008.The trade was made on May 2, 2008, with the 7:30 AM central time newsrelease.Prices shot up on the news and then settled down after digesting it.With mynew software, NewsTraderTM, I was able to use the news to make money.we were able to take some profits from the market.We traded the E-miniS&P futures, and the trade is charted in Figure 7.3.Again, those who are beginners should never try to trade a newsevent because prices are too unpredictable.As the above chart shows, af-ter traders considered the move, prices gradually moved down.A traderhas to be quick and right to make money at the time the news comes out.That takes experience and practice.Practice and hone your skills with asimulation; not when money is on the line.A 9:00 NEWS STRATEGYThe first thing to note about this strategy is the time that it is employed.At 9:00 AM we are trading in Time Segment 3.The day-trading session inthe United States has begun.American financial markets are leading theP1: JYSc07 JWBT016-Busby October 1, 2008 21:9 Printer: TBDNews Pays 93way and the world is looking to our shores.Also note that at this time,the open outcry pits at the Chicago Mercantile Exchange (CME) have beenoperating for 30 minutes.I use the high and the low of this time frame asa benchmark to gauge sentiment and evaluate prices.For example, say thehigh of the S&P during this time is 1348 and the low is 1340; if prices breakabove the high of the 30-minute range (1348), I consider the move bullish,and below it (1340) I deem it bearish.I use all of the data available to me.That is, before making this trade, Ilook at the Dax to determine whether it is above or below its 6:00 AM price.I look at the other futures indexes to get a sense of the market s mood.Are they making new highs, new lows, or just hanging out? I also checkindicators like the NYSE issues and the Nasdaq issues, and other statisticaldata.However, I have one other important bit of data that can help meat this particular time I look at that 8:30 to 9:00 AM price bar on the S&PE-mini futures
[ Pobierz całość w formacie PDF ]