Overnight Overview for 8/28/14

Wednesday saw mixed and moderate results for the major indices. It also showed mostly mixed and moderate edges for overnight traders. Below is a look at the Odds Sheet as it stood near the close.

2014-08-28 image1

There were two index securities that had their Averages showing up in green. These were IWM and NQ. ES is what I trade, and it is the security whose Odds I pay closest attention to. It showed no edge. Price Action was slightly bearish while internals and Seasonality were just above breakeven, making the Averages both very close to breakeven. The EdgeFinder was blank, and offering no strong evidence. So I sat out.

Futures had a rough night with more news of war out of the Ukraine. Europe stocks were hit and the US market gapped down at the open today. ES opened 8.50 points below Wednesday’s close. So while I have not had a trade in a while, I was glad to avoid that.

Have a great night trading, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

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Overnight Overview for 8/27/14

A moderate close higher on Tuesday led to moderate Odds and edges for overnight traders. Below is a look at the Odds Sheet as it stood near the close.

2014-08-27 image1

For the 2nd day in a row the Averages column was all-white. This again means that nothing was meeting the min criteria for a possible long or short trade. ES is what I trade, and it showed mild bearish inclinations for Price Action, Internals, and Seasonality. But they were so mild that the Averages still did not meet the min short criteria of an Up Gap % of < 45%. The EdgeFinder (and yesterday’s blog post) suggested a mild downside inclination as well. But we are not in the kind of market where I believe getting aggressive on the short side is a strong approach. So it was an easy decision for me to just sit out.

It would not have mattered much either way as ES did very little overnight and opened this morning just 0.25 points above the 4:15 close on Tuesday.

Patience can be one of the most difficult aspects of trading, but I have learned over the years that it is also one of the most important in order to keep drawdowns in check. For those that did not see it, Dr. Brett Steenbarger wrote a great little post on this topic at TraderFeed yesterday.

Have a great night trading, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

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50-day Highs & How Tuesdays Are Different

ES looks poised to close at another new high today. For a long time, closes at 50-day highs were followed by gaps down the next morning on a fairly consistent basis. The profit curve below shows results of going long ES any overnight that closed at a 50-day high and then exiting at the 9:30 open the next day (commissions are not included).

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As you can see, the steady decline bottomed out in early 2013. After 13 years of suggesting a downside edge, 50-day highs have not exhibited the same behavior for the last 1.5 years. This is something I have had to adjust to and has been a topic of discussion many times in the Overnight Edges Trade Discussion Room. Perhaps it is due to the current round of QE, or maybe it is some other shift in the environment, but whatever the reason, the change is evident.

Interestingly, though, Tuesdays have resisted this market change. Below is a study of overnight performance following Tuesdays that have closed at 50-day highs.

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The numbers certainly look bearish. Here is a look at the profit curve.

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No sign of the downside edge losing steam here. Traders may want to keep this in mind if ES holds on and closes at another new high tonight. Of course I’ll also be taking into account any other evidence that emerges before making my final trading decision.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

 

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Overnight Overview for 8/26/14

Monday saw the market make solid gains and new highs, but it did very little to inspire overnight traders like me. Below is a look at the Odds Sheet as was seen near the close.

2014-08-26 image1

All-white means that none of the index securities we track were meeting the min criteria for a possible long or short trade. It is also typically a dead giveaway that I won’t be getting involved in an overnight trade. There were some studies that appears in the EdgeFinder suggesting a moderate downside inclination, but they were not nearly compelling enough to entice me to ignore the weak Odds and try a trade.

As it turned out the market ignored the bearish studies and instead gapped up a small amount on Tuesday, with ES opening up 2.75 points above Monday’s settlement.

I’ll be back later today with some research for tonight.

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview for 8/25/14

Friday was a mixed and mild day for the stock market, and the overnight indications also appeared mixed and mild. Below is a look at the Odds Sheet as it stood near the close.

2014-08-25 image1

IWM was the only index security we track that met the standard min criteria for a possible trade. It indicated an edge to the long side. ES is what I trade and the security with the Odds that I most closely focus on. While Internals were clearly bullish, Price Action and Seasonality were modestly bearish. This left the Average Up Gap % and Profit Factor just a little above breakeven. There were no strong studies appearing in the EdgeFinder, either. So overall evidence was not compelling, and I sat the night out, as I have done for the last several.

As it turned out it was a pretty good weekend for futures. ES opened strongly Monday morning with a gap up of 8.25 points.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview for 8/22/14

Thursday was a solid day for the market as the SPX hit a new high for the 1st time in a few weeks. But the overnight outlook was not as cheery. Below is a look at the Odds Sheet as it stood near the close.

2014-08-22 image1

The Odds Sheet was all white on Thursday, as it has been several times in the last week or so. This means that none of the indices we track were meeting the minimum long or short criteria for a possible trade. There was some evidence pointing to the downside. There were several EdgeFinder studies that appeared that all pointed south. Also, I noted in the Trade Discussion Room that ES would have likely met the min short criteria if it closed at 1991.25 or higher. So I was ready to take a short trade overnight if that happened. But price pulled back from that area late in the day and the market did not provide a high-probability setup. So I sat out.

As it turned out ES did gap down this morning to the tune of 1.75 points. It’s unfortunate I did not get the setup I was looking for, but when the Odds are not there, I don’t gamble.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview for 8/21/14

Wednesday was a mixed day for the market and it resulted in a mix of evidence going into the overnight. Below is a look at the Odds Sheet as it stood near the close.

2014-08-21 image1

The EdgeFinder was pointing out bearish studies, most of the Odds were neutral, but NQ was bullish. To many crosswinds for me meant I sat out.

As it turned out there was just a small 1.75 point gap up Thursday morning for ES, so I did not miss out on much of a profit opportunity either way.

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview for 8/20/14

Market movement over the last few days has failed to generate much in the way of strong overnight edges, and Tuesday was another example of that. Below is a look at the Odds Sheet as it stood near the close on Tuesday afternoon.

2014-08-20 image1

As has been the case a few times recently the Odds Sheet was all white. This means that none of the indices we track met the minimum criteria for ether a long or a short trade. The EdgeFinder did point out some bearish evidence. And I discussed in the trade room that if ES closed a bit higher it could have seen lower Odds that would have allowed it to meet the min short criteria. So there was some discussion about possibly shorting.

But the Odds were not quite there at the close, so I sat out. The failure to close up a couple of points higher was unfortunate, since ES did gap down a little this morning (1.50 points). But when the Odds are not there, I don’t get involved.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview for 8/19/14

Monday was a rally day for the market with the major indices all putting in solid gains. But the overnight stats did not look terribly appealing. Below is a look at the Odds Sheet as it stood near the close on Monday.

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SPY met the min criteria for a possible short trade, but it was alone. There was some other evidence that also pointed south, but the setups that those studies examined had not exhibited bearish tendencies in recent times. ES is what I trade. It’s Averages were mildly bearish, but not enough so that it met the in short criteria. So there was no trade for me.

And that was a good thing, because the market again gapped up, with ES trading 5 points above Tuesday’s close when the NYSE opened this morning.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview for 8/18/14

Friday saw the market put in mixed and moderate results, and that is also what our overnight indicators looked like – mixed and moderate. The Odds Sheet from Friday afternoon can be seen below.

2014-08-18 image1

When the Averages column is all white that means that none of the index securities we track met the min criteria for a possible long or short trade. It would be extremely rare for me to take a trade under these circumstances. The EdgeFinder came up blank and I was not seeing any other evidence so compelling that I was inclined to trade. So I did not take a weekend trade.

Despite the mixed Odds, ES did manage a strong move overnight and gapped up 9.75 points this morning. That happens, and it does not bother me in the least. I don’t look to capture every overnight move – just the ones whose setups have been shown to be favorable in the past.

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview for 8/15/14

Thursday saw a further rally for the market, which led to some mixed evidence for the overnight. Below is a look at the Odds Sheet as it stood near the close.

2014-08-15 image1

IWM was the only security we track that met the min criteria for a possible trade. It suggested a longside edge. Thursday, was unusual in that there seemed to be fairly strong evidence pointing in both directions. Seasonality was strong, but Price Action and Internals showed weak Odds. This left the Averages only moderately bullish. The EdgeFinder showed both bullish and bearish studies, so no clarity was offered there. With so much muddled evidence I decided not to take a trade.

As it turned out, Seasonality won the night and ES gapped up 5.50 points at the NYSE open this morning.

Have a great weekend. Good luck if you take a trade, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview for 8/14/14

Wednesday’s rally failed to generate a strong overnight setup based on my criteria. Below is a look at the Odds Sheet as it stood near the close on Wednesday.

2014-08-14 image1

When the Averages column is all white that means that none of the index securities we track met the min criteria for a possible long or short trade. It is would be extremely rare for me to take a trade under these circumstances. I was not seeing any other evidence so compelling that I was inclined to trade. So I sat out Wednesday night.

It did not matter much, since Thursday opened with just a small gap up of 1.50 points.

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.