Pre-open scenarios

There was more selling and more trendline broken yesterday, but the move reversed during the afternoon session to close just 50pts down. On the daily chart, the market has rejected the 200MA at 11766 so far but is well above the 50MA at 11313. Another critical level is the 200MA on the weekly chart at 11467 – yesterday’s low on the nose. ON the market retested weekly S1 and has since been positive and is now breaking out of the upper side the triangle formed by yesterday’s PA. There are unfilled gaps at 11596 and 11604 from 20th March, so these are an obvious target.

Scenario 1: fills gaps and reverses, at which point it will need to decide if it wants to break the Imp-Corr TL to trigger another wave down.
Scenario 2: moves up to the gap and continues towards 665 or 71
Scenario 3: misses gap (although this looks like it will fill in the futures session) and this triggers more selling.

1-month daily chart
3-month daily chart

Futures opened at 11563, leaving a gap of +13pts against the cash close and -19 against the futures close. The futures open was within yesterday’s range so there are no ex-gaps.

Physical/body

Sleep – what time did I go to bed? 23:45 so 7hrs sleep
How much coffee have I had? Half the medium sized pot
How do I feel? Neutral

H4 and H1 charts from the morning futures session

H4 chart on the left and H1 on the right. Screenshot from around 8:30 CET

One of the best trades on the Dax is the break of a TL that supports a corrective move and that what we have here. On the upside, yesterday’s low could have formed a HL in this sequence and the market might well want to go and fill the gaps above.

What the market looked like at the end of the session

M5 chart of the cash session on 22 Mar

PA during my trading hours

Key points about today's PA and setups that worked

A textbook move: fills the gaps from Wednesday and then breaks the supporting TL that I have been watching for the last few sessions.

  • with a positive futures session and an open above the high, the market looked to be continuing the momentum from Thursday’s reversal off the lows
  • Wednesday’s ex-gap filled during the futures session
  • then the futures gap filled in the opening bar, followed by Wednesdays closing gap 11604
  • the market continued beyond the gaps, picking up any stops that were waiting above them and the orders at the Weekly Pivot
  • once this was done the market dropped 50pts in a minute and then with a very monorPB, broke through the TL
  • SUP 1 and SUP 2 were active levels but the PBs were less than 10pts, indicating more downside to come
  • the Weekly 200MA is a very strong long term level, so an overshoot of 17pts is insignificant
  • SUP 2 saw a bounce of 40pts, which formed a perfect Imp-Corr structure over 2hrs which then broke to fresh lows

How effective was my Neutral Zone? I didn’t draw this on today, but the upper side would have been gap fill and the lower bound was the TL
How precise were my levels? RES 1 was a level to trade in the futures session but not once the cash opened – although I could have just about got a 2:1 H-C-B trade from it. SUP 1 gave an opportunity for an H-C-B trade but the 3Min Bolli failed; SUP 2 overshot by around 17pts

What I did

TOTAL = 4.5R | # Trades 14 | Winners 4 | BE 3
Average R per winner = 2.7 | Losses > 1R = 0 | Scratched (loss<0.5R) = 1
R-multiples: trades 2:1 or more = 1 | trades 5:1or moreĀ  = 3
Outcome using standard TP strategy and same trades:
(STE at 1:1 50% off at +20 and 50% off at +50)
2:1 trades (4R) + 5:1 trades (3 x 2.5R) + BE (0R) + Losses (-6R) = 5.5R
Variance vs. SYS = -1R

Today's most gorgeous setup

3Min Bolli setup at the weekly pivot. With the trending, stair-step move into it, yesterday’s close at the highs and price hugging the Bolli Band, this did not look like a good setup but it was a strong level outside the Bollis. Also, although the market looked positive, it was not full of the kind of MOM I see when it’s fresh from a break of a level.

For reference: 6 month cash chart at COB yesterday

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