Content

Pre-open Scenarios

With the gaps below and the ON action signalling an open below yeserday’s low, the tone was bearish – at least in the short-term. The question was whether we would see a fast, impulsive move down or a slow, steady filling of the untraded zone between Friday’s high 11317 and Monday’s low at 11457.

If we opened below yesterday’s low, this would leave yesterday’s candle as island reversal – a bearish signal; but’s also true that yesterday’s cation left a big gap to be filled so the market would be drawn to that zone to trade in areas where there had been no trade.
The upwards sloping TL on the H4 chart on the left is the critical line for the bulls – below this the downtrend resumes. On the H1 chart you can see that te market has been weak since yesterday’s flurry of buying at the open, which went straight into key resistance and reversed (pink square). The question to day is if and how the market will fill the open gap (orange square)

What the market looked like at the end of the day

So the island reversal was exactly what happened – market managed to open above CBOS but was then pushed back by (it seems…) the 169 on the M5 (not a timefrane I look at) and more importantly, the 50% of the Oct 17 to 26 move. This fib has been very active as a KL level over the last few days.

How effective was my Neutral Zone? The Neutral Zone today covered all of yesterday’s PA plus the gap and price stayed within the zone for the entire session.
How precise were my levels? The RES levels weren’t in play and SUP 1 was spot on.

Strategy for today’s PA

Selling an opening spike worked well, as did a 3Min Bolli at the 50% fib of 17-26 Oct move. After that, strategies that I normally use for trending markets were effective. Without the unfilled ex-gap above – which made me wary of taking shorts – this was clearly trending PA on the H1 chart.

Selling arund 11430 worked at the open, then after the initial reversal, the 3Min Bolli system gave no further shorting opportuntites. It did give a lovley long at CBOS and again at my SUP 1 level. Interesting how in this PA context, the 169 on the 3Min gives a fading opportunity.
After the failed bull bar into 50% fib of 17 to 26 Oct move, the market makes a perfect Igloo formation, the only issue was that it was an entry on S1. This level turned out to make no real difference (perhaps because it had already a lot of order flow), and the trade could have been taken as a Imp/Corr on the M1 TL.

What was today’s PA? Was it ranging or was it trending? When and how did I know which one it was

What I did

09:00 Buy x 21 @ 11429 | H1 TL break | P&L = -1R
09:00 Sell x 86 @ 11430 | Cash open spike | P&L = 0.7R
09:29 Sell x 47 @ 11424 | Igloo | P&L = +1.8R
09:47 Buy x 48 @ 11420 | NONE reaction to missed buy | P&L = -0.5R
09:58 Buy x 79 @ 11408 | 3Min Bolli | P&L = -1R
10:07 Sell x 86 @ 11398 | M1 TL break by hand, TL, BNR | P&L = +1.3R

TOTAL = +1.4R

Today’s most gorgeous setup

Chart plus short explanation

For reference: 3 month cash chart at COB yesterday

Comments are closed.