Pre-open Scenarios

The market has been very strong over the last few days and from the ON action, it looks like yesterday’s compressed range was a fire-power building phase for the bulls and maybe throwing a few bulls off the bus before the next move up. The market is still below the up channel formed by January’s bull run and there are many layers of resistance above (11,368 is previous swing high, unfilled gaps from early Jan at 11,465 and 11,335). The market needs to clear these and get back into the bull channel before it can really be seen as trending. On the downside, there are a couple of clear TLs that are supportin this move so a break of these could mean that the positive action is over.

1-month chart showing the upside target at 11,368; the purple arrow show where the market was trading during the futures session. It also show that despite yesterday’s big gap up, the market didn’t do much with it and closed close to where it opened.
3-month chart to show how range bound the marjet has been for the last 3 months, despite some very strong and fast moves within the range.

Futures opened at 11,196, leaving an up gap of 70pts against the cash close and 48pts vs. the futures close. The futures session has been neutral and hiogher levels have so far been rejected.

H4 and H1 charts from morning futures session

What the market looked like at the end of the day

Key points about today’s PA and setups that worked

Strong ON and in the futures session – this PA is perfect for gap fill fades as it means that the trade is the direction of the ST trend. Key points about today:

  • ex-gap fills during the first 15min of trade, and the PA also suggests that the upward sloping TL is active
  • bounce from ex-gap sees LH vs. the futures session high then a fast reversal into the TL, y’day high and 169, but this confluence didn’t produce much of bounce – just to R2 which was an obvious target
  • selling below the TL robust, with small Impulsive-Corrective structures at SUP 1 and pivot
  • The low of the day was SUP 2. the confluence fibs and daily chart 21MA

How effective was my Neutral Zone? The lower edge of the Neutral Zone was the TL and this was spot on as the active TL today; the upper edge wasn’t in play.
How precise were my levels? None of the RES level were in play. SUP 1 didn’t offer much of a reversal trade but it gave a nice short using a compression above it to enter. SUP 2 was on the nose as the low of the day.

What I did

TOTAL = 0.1R | # Trades 18 | Winners 4 | BE 2
Average R per winner 2.1 | Losses > 1R 1 (1.1R)
R-multiples: trades 2:1 or more 4 | trades 5:1or more 2
Outcome using standard TP strategy and same trades:
(STE at 1:1 50% off at +20 and 50% off at +50)
2R + 7R + 4BE* +-10R = -1R

*If following my rules i.e. STE at 1:1, 4 trades were BE

Today’s most gorgeous setup

Break of a KL using a minor corrective move and TL break to enter.

For reference: 6 month cash chart at COB yesterday

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