Intra Day Patterns
                       Intra Day Patterns                       It is easier and more effective to day trade  if  youlimit your self to a few simple but easily recognized patterns. All of  yourentries will be determined by your interpretation of the  market  and  stockdynamics at the time you are deciding to enter your trade.
                         1.Opening Reversal (OR)
                            This is a trade you  will  usually  get  in  thefirst 30 minutes of trading. The trade sets up after  an  emotional  openingdue to early morning S&P futures activity or  some  news  announcement  thatcreates the usual overreaction.
                       Trade Set up (Buys, Sells are reversed)                         1.Stock opens and sells off no  more  than  25%  ofits daily range. (maximum is 33%)                         2.The stock makes a quick  reversal  in  price  andtrades back through the open.                         3.Entry is 1/8 above opening price.
                       OR’s will be selected  from  your  list  of  high  RSvalue stocks and from your Trading Plan stocks for the day.  If  you  see  astock(s) that is demonstrating strong relative strength as the market  openslower, and this stock is only slightly below its opening  price,  then  thiswill usually be your best selection, especially if it is  a  high  RS  valuestock.                       Because of the early trading noise, (9:30 – 10:00  AMEST) you must keep tight stops. This trade must be accompanied by  improvingmarket dynamics, (going up) and the  stock  dynamics  which  you  have  beenobserving must be good.                       Also, be ready for a second entry if stopped out  andif the dynamics are still solid. If the futures are on a search and  destroymission, i.e. taking out both the early low and early high before the  firsttrend of the day, you will often get second entries.
                       HWP
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                       Day 1 - HWP trades down to and closes just above  its50-day EMA. The stock is down 6 5/16 on the day. The S&P 500 cash  index  isonly down 3 3/4 points. The company is expected to announce  earnings  afterthe close on 8/16.                       Day 2 - HWP rallies and closes up 2 15/16 (2.8%)  andthe S&P 500 finishes up 2.3% on a good  market  day.  I  circled  HWP  as  apossible trade on Day 3  because  the  company  was  supposed  to  make  thewhisper earnings number. If you get trade entry 1/8 above  the  Day  2  highget on  it  because  the  momentum  traders  will  probably  front  run  theearnings.
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                       I mentioned HWP on the call this morning. Take it  ifthey come for it to front run the earnings.
                       The stock gapped open 1 7/16 points to 107 7/16  fromthe prior close of 106 (BAR 1). It traded down to 106 11/16 (BAR 3)  showingstrong relative strength, as it didn’t come close  to  filling  the  openinggap. The stock quickly reversed on volume and traded back above the  openingprice. It traded to 108 1/2 on a WRB (BAR 6), consolidated  to  a  FLAG  andbroke out again at BAR 10, moving straight to 111 1/2 before fading.                       The discipline of the pattern and  the  dynamics  putyou in the trade. We got lucky that the momentum front runners  took  it  sohigh. They got their lunch handed to them the next day as HWP closed down  53/4 points.
                       Opening Reversal Recap
                       It is important to note that this HWP  example  is  astock that gapped up, traded down, remaining above prior close and  reversedopening to the upside. Most of your OR’s will be stocks that open  below  ortrade below the prior close  then  reverse  opening  to  the  upside  (sellsreversed).