Pre-open Scenarios

A corrective up trend is forming to retrace the October declines so I am on the look out for a break of the TL supporting the corrective move. On the bullish side though, we are continuing to see higher highs and lows. The market has not yet retraced the whole of the second leg of October’s falls (17th to 26th) but it’s come very close – having exceeded the 78.4% level on Friday.

On the bearish side, I was focusing on the two lower TLs in the orange square (one from the D1 chart and a shallower one from H1).

On the bullish side, I wanted to see a break of the ON range – which was also the futures close – on the bullish side. Both of these events happened (the long break was only by a couple of pips) but the market did absolutely nothing with them – as you can see from the H1 chart here:

Strategy for today’s PA

There were levels everywhere; so although some of my TLs broke, the market then headed straight into a KL and reversed. Overall the market was sbullish while we held the cash cahrt weekly 200MA.

The PA was contained between the Futures close/upper D1/H4 TL on the upside and the lower D1/H4 TL on the downside.

  1. At the open, it looked like there was an opportunity to buy gap fill, but by 8:01, when the spread is narrow enough to trade, the move was already over.
  2. Just after the open, the market dipped down to the minor support I identified (ON low)and then immediately reversed towards the upper TL. This set the picture for the rest of the day: new highs sold and new lows bought, but with a bullish tone as each reversal from the highs saw a higher low.
  3. Market closes the futures gap, giving a nice Bolli Band opportunity.
  4. Market retests the Futures close and D1/TL Upper TL again, having made a higher low.
  5. Third rejection of Futures close and D1/TL Upper TL after making a higher low in between.
  6. Decline from there hits the critical cash weekly 200 MA and reverses.
With ranging PA, the 3Min Bolli strategy works a treat.

What I did

Because today’s results were so bad, the day’s trading activity is examined in more detail – see Another Manic Monday. This means I cannot trade again until I have written everything up and defined some actions to fix these problems.

TOTAL = -7.4R

Today’s most gorgeous setup

Fade the Futures gap fill. This did not see a huge number of points, but it was not a day for that – instaed it was a very high probability trade with very clear PA.

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