Welcome to The Discovery Trading Group

 Announcements  Comments Off on Welcome to The Discovery Trading Group
Nov 292011
 

We are a group of professional and amateur traders founded by principals of a quantitative research firm which develops strategy and periodicity diverse programs and risk modeling tools. Our own internal process involves using this webspace as a collective resource for sharing both discretionary thoughts during intraday sessions and as a sort of virtual think tank for our ongoing quant research. A big part of that research has consistently shown that the ‘Holy Grail’ of the purely mechanical, single market intraday trading strategy that produces near linear returns without significant ongoing adaptation DOES NOT exist. As such we have found that for most traders pursuing single market intraday strategies, an adaptive, risk management focused discretionary approach is likely to bear the most fruit. Ironic, given that rigid, purely mechanical systems are what the vast majority of retail traders (including us at one time) seem to be in relentless pursuit of. 

In the spring of 2010 we created a private, member only forum behind the blog devoted to our ongoing discussions related to discretionary analysis of market structure, price action and order flow to like minded retail traders as a sort of experiment. Since we have always found the format in which we use this space privately to flesh out ideas to be so beneficial, we wondered if it might be even more fruitful to increase the sheer numbers of those participating in this process and with that, DTG as it exists today was born. By any measure, the experiment has been almost unfathomably successful for us in terms of its role in keeping us sharp in whatever discretionary or quantitative work we happen to be engaged in at the time. Sharing our experiences and interacting with the greater numbers continues to spark new ideas for all of us, making our little experiment a huge win on all fronts in our book. For information about the types of trading which are the foundations for what most members pursue here, follow this link:

Methodology Framework

 Posted by at 11:24 am

11/01/2024 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 11/01/2024 ES Trade Plan Worksheet
Nov 012024
 

The Nasdaq 100 (-2.7%) and S&P 500 (-1.9%) tumbled Thursday after Microsoft (MSFT) and Meta (META) earnings beat expectations but raised market concerns that the rising AI investment investments are not paying off.  The declines were enough to snap five straight months of gains for the S&P 500.

The Personal Consumption Expenditures index largely match expectations for the last key inflation meeting for the Fed monetary policy meeting next week.  Initial jobless claims sunk to a five-month low.  This morning, we have the important October Jobs Report.

After the bell Thursday, Amazon (AMZN) and Apple (APPL) released earnings.  Amazon shares popped 5% higher after topping revenue and EPS estimates.  Apple beat expectations but shares slid due to a one-time charge from a reversal of a European General Court decision.

Intel (INTL) also reported after the bell.  Despite Q3 losses, the company provided strong data center revenue and positive Q4 guidance.  Intel shares jumped 15%.

Nvidia (NVDA) fell 5% Thursday on AI investment slowdown fears and potential AI chip delivery delays.  Microsoft mentioned in their earnings report that delays of AI chips weigh on their AI cloud business guidance.  Semiconductors fell across the board with the PHLX semiconductor index falling 4%.  Advanced Micro Devices (AMD), Intel, Qualcomm (QCOM), Broadcom (AVGO), and ARM all fell more than the market indexes.

With US elections next week, it’s clear from a review of earnings transcripts that CEOs are avoiding or outright shutting down political inquiries from analysts, far more than anytime in recent history.  Political emotions are running so high that most company executives are trying to stay out of the political fray and avoid offending large portions of their customer base.

It’s not uncommon for corporations to seek political favors, however Microsoft, Bud Light, Target, Amazon, and Starbucks have faced profit denting backlash for political or social positions that have most companies remaining avoiding political positioning this election season.

Corporate earnings premarket include Exxon Mobile (XOM), ARES, CAH, CHTR, CVX, CHD, D, ENB, LYB, MGA, NMR, NVT, PPL, TROW, and WAT.  Earnings after the bell include SPG.

The economic calendar includes the October Jobs Report (Non-Farm Employment Change, Unemployment Rate, and Average Hourly Earnings) @ 8:30am ET, S&P Global Manufacturing PMI @ 9:45am ET, ISM Manufacturing PMI & ISM Manufacturing Prices and Construction Spending @ 10:00am ET.

Volatility jumped higher on Thursday’s stock selloff.  The ES 5-day average daily rang has jumped back up to near 65 points.

Whale bias is slightly bearish going into the 8:30am ET Jobs Report.

 

 Posted by at 5:11 am

10/31/2024 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 10/31/2024 ES Trade Plan Worksheet
Oct 312024
 

Despite Alphabet (GOOG, GOOGL) earnings optimism, all three major indexes dropped on Wednesday.  The Dow slid 0.2%, the S&P 500 fell 0.2%, and the Nasdaq 100 dropped nearly 0.6%.  GDP data showed the US economy growth came in under estimates at a 2.8% annualized rate.  However, consumers are keeping a robust pace of spending as inflation continues to fall.  ADP data revealed a surge in October payroll growth which complicates the economic read for the Fed.

Gold continues to rise into record territory.

This morning’s focus will be on the PCE Price Index, Employment Cost Index, and Unemployment claims, all @ 8:30am ET.  The monthly jobs report will be released on Friday.

Both Microsoft (MSFT) and Meta (META) topped earnings estimates.  However, Meta’s aggressive 2025 capital spending plans and increasing infrastructure expenses sent META down after hours.  Meta is working on their own AI service which will answer user questions about current events.  Meta currently relies on Microsoft and Google search engines to answer certain user queries.

Super Micro Computer (SMCI) shares plunged over 35% to near $30 after the San Jose, AI focused company filed with the SEC that their accounting firm Ernst & Young resigned.  The Big 4 accounting firm said, “We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management’s and the Audit Committee’s representations… [and they are] unwilling to be associated with the financial statements prepared by management, and after concluding we can no longer provide the audit services in accordance with applicable law or professional obligations.”  SMCI reached a record high of $122.90 back in March.

Corporate earnings premarket include Mastercard (MA), Stellantis (STLA), Uber Technologies (UBER), ALNY, MO, AME, BUD, APTV, ARGX, BALL, OWL, BMY, CNQ, CVE, LNG, CMS, CMCSA, COP, ETN, ETR, GNRC, HLN, H, IDXX, ING, INSM, ICE, IP, IQV, K, KIM, LI, LECO, LIN, MBLY, NCLH, PH, PWR, REGN, RBLX, SN, SHEL, SIRI, STM, TAK, TFX, CI, EL, SO, TTE, GWW, WEC, WTW, XEL, and XYL.

Earnings after the bell include Amazon (AMZN), Apple (APPL), Intel (INTC), Merk & Co. Inc. (MRK), AES, AMCR, TEAM, CPT, CTRA, CUBE, EM, ERIE, IR, JNPR, LNT, ONTO, RGA, and VICI.

The economic calendar includes key economic data: Core PCE Price Index, Employment Cost Index, Unemployment Claims, and Personal Income/Spending @ 8:30am ET & Chicago PMI @ 9:45am ET.

Volatility ticked down on Wednesday with the ES 5-day average daily range around 50 points.

Whale bias is short into the 8:30am ET economic numbers.

 

 Posted by at 5:13 am