The market is now down 430pts from the high on 3rd May. The 50MA is in sight at 11807. But ON there has been a retrace move and this could continue into the open. There is the 23.4% retrace of this move, the pivot and 21MA all between 12125 and 12156. So a move above this area will suggest more than a corrective move. Ideally, the market will form a nice, clear corrective pattern and then break that to hit the key cash levels below. However, looking at the daily charts, this is still very much a counter-trend move in a very robust uptrend so I need to trade accordingly.
Futures opened at 12096, leaving a gap of +23pts against the cash close and +3 against the futures close. The futures open was within yesterday’s range so there are no ex-gaps.
Sleep – what time did I go to bed? 23:45 so 7 hours
How much coffee have I had? Half a medium pot
How do I feel? Aggitated, things feel like they are going slowly and I am disorientated
H4 and H1 charts from the morning futures session
Time stamp: 8:43
Scenario 1: corrective action continues in a corrective style and hits the 12138 area, the market makes a stair step up to this level
Scenario 2: inspired by the ON action, there is powerful buying at the open – perhaps with an early dip down to fill gaps and then the market trends up to 12200 area – excellent, spot on, a slow was the futures close
Scenario 3: the market retests ON high at the open and then falls away to make new lows – perhaps revisiting the 50MA at 11807
What the market looked like at the end of the session
PA during my trading hours
Key points about today's PA and setups that worked
A false break up and then a real move up after gaps were filled
- the cash gap was filled on the opening M1 bar
- from there, there was a very small and short pullback at the RES 1
- after RES 1 broke, the next target was a RES 2 at weekly
- the market reversed in between the 23.6% fib of this move and the KL
- it then formed a triangle below the level before break upwards
- the reversal of this break was 12162 which was just a few points above the pivot but I didn’t have any other level there
- and the push beyond that was 12184 – again I didn’t have a level there and was looking for 12200
- after failing before 12200, the market made a sharp decline to fill the futures gap around lunchtime
- from there is bounced to 12209, retraced back to the 12162 level again and then made an HH during the US session
How effective was my Neutral Zone? The market failed to get to the upper boundary on the first attempt but broke through it on the second, with a few bars of vibration around the level; after getting back inside the range to fill the futures gap, it popped back out of it a second time and this time it hit the level on the nose, pulled back and then burst through.
How precise were my levels? RES 1 saw a small pullback which didn’t work as a trade but gave a long opportunity; RES 2 was definitely a level but the PA around was less clear in the morning session than it was later on; RES 3 was spot on. SUP 1 was spot on.
What I did
TOTAL = 0.5 R | # Trades 4 | Winners 1 | BE 0
Average R per winner = 3.5 | Losses > 1R = 0 | Scratched = 0
R-multiples: trades 2:1 or more = 1 | trades 5:1or more = 1
Outcome using standard TP strategy and same trades
2:1 trades (1R) + 5:1 trades (2.5 x 2.5R) + BE (0R) + Losses (-3R) = +0.5R
My results vs. SYS = 0R
ON TILT trades = 1 (-1R)
Rule of 3 trades = 0 (0R)
Scratched trades = 0 (variance vs. rules = 0R)
Average coherence = 2.7
Today's most gorgeous setup
This was a the gap fill on the opening bar, which went more than 8R before reversing. The low of the first bar was 12091, 2 pts below the close, and the trade was supported by the M1 169 and by SUP 1 level.