Intraday Report for Tuesday, March 10, 2015
Daily "Idealized Trades" Report
Trading Lessons from the Intraday Frame (study)
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Corey Rosenbloom, CMT
Afraid to Trade®
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Intraday Report for Tuesday, March 10, 2015
Lessons to Learn from Today's Trading Day
Let's start today's exciting "lessons to learn" section with a quote from yesterday's report:
"A clean breakdown under 2,060 suggests that the market will continue retracing lower down toward the 2,000
confluence. Reference mid-December 2014 for a similar situation of a 20 EMA break into 50 EMA touch, initial bounce...
and last time price broke lower. Monitor - and thus trade - what happens this time."
Given the bear flag and key pivot of 2,065 (2,060), we should have been ready and expecting a possible sell day that
could quickly develop into a Trend Day - and that's precisely what happened. Namely, we had a large downside opening
gap which is the starting point for almost any powerful T3 Trend Day (as discussed in this morning's market briefing with
TradeStation).
Simply stated, the gap down occurred, the expectation/dominant thesis called for a down-day (possible Trend Day), and
as the session progressed, your one-and-only job/goal was to short-sell retracements AS LONG AS price remained under
the falling 20 and 50 EMA on the 5min chart. If you did anything else, you made a trading mistake and probably lost
money as a result - which is exactly what should have happened as well (we DO NOT fight Trend Days - that's a very
simple rule we should always follow at all times).
I'm highlighting two clean pro-trend (day) retracement/flag trades in the morning, worth over 10 @ES points or $1.10 in
the SPY futures. We enter on the touch of a falling moving average or on the break under a rising 1-min 'flag' trendline.
We target the prior low and preferably hold as long as possible, until price breaks a falling trendline and 5-min reversal
candle high. I repeat - if you did anything else, you probably lost money and that's precisely the expected outcome, in
the same way betting on a single number on the 38 number roulette wheel should be expected to lose your money
when you place that bet. It's just math. Fighting this reality is like fighting gravity - you can succeed temporarily but in
the long-run, gravity wins.
For Tomorrow....
ECONOMIC REPORTS TO WATCH:
Oil/Petroleum Report (10:00am EST)
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Corey Rosenbloom, CMT
Afraid to Trade®
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Intraday Report for Tuesday, March 10, 2015
Things on Traders' Minds:
Keep in mind that this section WILL NOT change frequently. It's important to understand these themes and watch for
new events in the day-to-day activity.
EUROPE DEALING with GREECE ("Should it Stay or Should it Go?")
Greece has again dominated headlines with respect to "Will they say in the European Union or will they break away?"
It's difficult to forecast the outcome either way - logic suggests that a departure from the EU would be (at least a) shortterm negative during restructuring and losses that are incurred with possible default or write-down of outstanding
Greek debt (which is actually another issue beyond the "will they stay or go" question). However, in the longer-term,
Europe may benefit from letting a small, lagging country (that they have continually bailed out) go its separate way.
Summary: Just like 2011, markets are focused on "Will Greece stay and pay" or "Will Greece go and default?"
EUROPE'S QUANTITATIVE EASING PROGRAM (Underway: Money is Being Printed)
Speaking of global economies, we're seeing additional headlines that parts of Europe may further decline economically
and Greece is back in the news as to the "will they or won't they" leave the European Union. It's one thing to worry
about reduced demand/spending from continued economic slowdown - and the decline in equity prices that would
result - which would be standard logic but we have a new world of stimulus and central bank intervention.
Perversely, the worse headlines/economic reports get, the BETTER it is for the stock markets because the Central
Banks/Authorities will print money and engage in stimulus programs which historically have - through printing of money
and purchasing of bonds/debt - manipulated stock prices higher. The same logic is true for Japan and other large
economies with Central Banks large enough to print money and manipulate equity markets higher, as has been the case
in the United States through three rounds of money-printing stimulus.
Summary: We've seen weakness in Europe before but now, Central Banks (UK and ECB) are ready to act with stimulus
(intervention to attempt manipulation of stocks higher... again).
Multi-market Opportunities
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Corey Rosenbloom, CMT
Afraid to Trade®
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Intraday Report for Tuesday, March 10, 2015
The "Breakdown" Thesis triggered on a movement under 2,060 and the market collapsed - in distribution.
Gold buyers didn't hold $1,200 - and thus the price collapsed in the expected (and tradable) liquidation sell swing that
triggered under the $1,200 level as bullish stop-losses triggered. We're watching $1,165 now as the downtrend
continues. Note the bounce and stall - making $1,165 very important as the current bull/bear pivot.
Oil continues to be tradable for AGGRESSIVE/experienced traders only - new traders should seek other markets. If not,
then Oil is stabilizing within a trading range and should - could - again hold the $49 level for a support bounce. Oil will
be 'collapse bearish' under $48.00.
The Dollar broke out powerfully of its sideways trading range to continue the logical trend. The US is no longer printing
money via QE3 yet Europe/ECB will soon begin printing money, which should continue to boost the US Dollar.
Currencies take a bearish hit when central banks print money to manipulate their stock markets higher - it's just reality.
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Corey Rosenbloom, CMT
Afraid to Trade®
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Intraday Report for Tuesday, March 10, 2015
Power Trenders (Strong Trending Stock Scan)
We're seeing the NEW top nine relative strength leaders (via algorithm) in trending markets and the general expectation
is to buy retracements or breakouts in these strongly trending names. The logic is that what is strong tends to get
stronger (stocks attracting money flow tend to continue attracting additional money flow).
Right now these would be the names and thus candidates above for you to do additional research and add these to your
stock-scan list for possible inclusion into a swing trading portfolio on pullbacks or outright breakouts (notice Harman
(HAR) and its breakout plus continuity - along with EA (never, ever, ever fight/fade a strong breakout).
HOW WE USE THESE STOCKS:
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Corey Rosenbloom, CMT
Afraid to Trade®
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Intraday Report for Tuesday, March 10, 2015
I write the Power-Trending Stock Section for Swing Traders looking for candidates that complex stock scans will likely
miss. The scan targets strongly trending stocks and the expectation is that price will continue trending higher, though of
course additional analysis is required rather than just buying these names collectively.
To participate in these stocks, we typically wait for a pullback/retracement to a rising moving average or
Fibonacci/Trendline level to put on a buy/retracement where the stop is trailed under the average. These would be
similar to how I describe intraday 'flag' retracements on a developing Trend Day.
Game-Planning the Next Day (30-min)
Ultimately price may be completing a larger "Mirror Image Foldback" or wider Distribution pattern that will eventually
take the market back to the 2,000 level. There will be rallies and bounces up along the way - as we saw Monday - but
unless we see price instantly back above the 2,065 level, we'll keep our Dominant Thesis being the "logical bear"
pathway lower.
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Corey Rosenbloom, CMT
Afraid to Trade®
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Intraday Report for Tuesday, March 10, 2015
In this type of momentum environment, be careful and continue playing in the direction of the trend and price
movement.
I'd be remiss if I did not warn you of the dangers of a manipulation/short-squeeze of the market higher against what
logically 'should' happen.
Planning the Next Day (Daily Chart)
The breakdown under the 2,065 support target - 50 day EMA - makes us believe that a repeat scenario may easily be
occurring of the December "break of the 20 EMA, bounce one day, Break of the 50 EMA, collapse toward 2,000"
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Corey Rosenbloom, CMT
Afraid to Trade®
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Intraday Report for Tuesday, March 10, 2015
scenario. Quite simply, we're dominant thesis bearish under 2,065 and 2,060 as we expect a repeat pattern where price
trades (retraces) down toward the key confluence target near 2,025 and 2,000.
Keep it simple and note the power of sell-swings in this bull market - keep referencing the December sell-off unless
something major thwarts the downward price direction (in which we should build our short-term trades).
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Corey Rosenbloom, CMT
Afraid to Trade®
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