I didn’t trade on this day but here’s a summary of what happened.

Overall picture

Today was NFP day and the usual idea is that we drift up all morning and then sell off after the job numbers.

Here’s how the PA panned out today: as long as we stayed above the TL line that is supporting the corrective retrace of the early October impulse decline (the lower pink TL on the chart), we can stay bullish. In fact, we stayed well above the line and even breached the upper  TL in early trade.

What was interesting though was how precise the levels were:

  1.  The high of the day, from where we saw a dramatic reversal was a revisits the February 2018 low – having been support all those months ago, it is now resistance.
  2. The afternoon decline stopped at the Cash chart weekly 200MA – on the nose!

The Dax’s uncanny way of respecting these levels is what makes it so tradeable – and also impossible to trade if you’re not paying attention and/or don’t get this.

Weekly chart showing lows in Jan & Feb 2018 and today’s high in context.

Strategy for today’s PA

Here’s what worked today:

  1.  The market quickly went down to fill the ex-gap at the futures open and then took off.
  2. During the futures session, prices continued upwards until they hit R2 from where they reversed. This level (R2) was retested just after the open, and then we saw a deeper decline.
  3. The market made a higher low when it reversed at the 38.2% fib of the Sept 21 to 26 Oct decline.
  4. Before the NFP announcement prices hit the Feb 6 low from where they began their decline.
  5. The first leg of the decline reversed up to the 78.4% fib of the 17 to 26 Oct from where it made a lower high.
  6. It then spent the afternoon and evening making its way down the cash chart weekly 200MA, from where we saw a small bounce 

Today’s most gorgeous setup

Buying the ex-gap fill at the futures open, or – even better – selling the revist to Feb 6 low.

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