21 May: Bulls push up to the TL but ranging PA forms an inside day
21 May 2019
4 Jun: Sellers try a push down to BRN and then it rockets
4 June 2019Pre-open scenarios
It’s the first trading day of the month, which is statistically bullish. But the market opened ON with a large gap down, and it has since retraced only a small portion of the move, so the futures open was nearly 100pts lower than Friday’s close and 29pts lower than Friday’s low.
Despite the very negative ON action, we could see some strong buying today because the cash daily 200 MA is just below current prices at 11620. We also have the gaps above to fill. If the market breaks decisively below this level – which is also the ON low and S2 – we could see further large declines, but we really need to wait until the end of today’s session to see how much support the 200 MA will provide.
Daily cash 1-month and 3-month charts
Futures open
Futures opened at 11633.
- A gap of -94pts against the cash close and -70 against the futures close.
- The futures open created an ex-gap of 29pts against Friday’s low.
H4 and H1 charts just prior to cash open
Time stamp: 8:55
Best fit, if there is one, is highlighted in red at the end of the day.
Scenario 1: fills cash gap and then reverses to break 11620 and trends down all day
Scenario 2: sell from the open and then sees strong buying from 11620 – excellent, spot onScenario 3: sees buying from the open and then ranges between 11730 and 11620 all day
What would be today’s easiest trade(s) if they set up?
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- Buy at 200 MA
After the cash close
End of day H4 and H1 charts
Intraday M5 chart
Core trading hours PA M1 (9am to 11am)
Key points about today's PA and setups that worked
Bounced from 11620 and then added 180pts by the end of the US session
- The market opened around yesterday’s low and then rejected the H1 TL above
- From there it stair-stepped down to the 11620, pausing at weekly S2 and the 169 on M1 and M3
- It hit the daily cash 200 MA and S2 area and then stair-stepped up, pausing most significantly at Friday’s low and then using weekly S2 as support
- On the first attempt at the cash gap close, there was a pull-back of nearly 50pts to S1
- After that, the market moved up to RES 3, with pull-backs at each KL
How effective was my Neutral Zone?
Each day, I would define a neutral zone within which, PA could be deemed directionless.
The lower boundary of the neutral zone was spot on, and the upper bound saw one reversal and held prices back until the US session opened.
How precise were my levels?
SUP 1 was spot on; RES 1 saw a slight reversal but RES 2 was wrong and should have been the gap close while RES 3 was hit during the afternoon session and inspired a pull-back of over 50pts
What I did
TOTAL = -4R | # Trades 4 | Winners 0 | BE 0
Average R per winner = n/a | Losses > 1R = 0 | Scratched = 0
R-multiples: trades 2:1 or more = 0 | trades 5:1or more = 0
Outcome using standard TP strategy and same trades
2:1 trades (?R) + 5:1 trades (? x 2.5R) + BE (0R) + Losses (-4R) = -4R
My results vs. SYS = 0R
ON TILT trades = 4 (-4R)
Today's most gorgeous setup
This was the trade I had identified before the open and even in my analysis yesterday evening – the buy at S2 and daily cash chart 200 MA. It set up beautifully as a 3Min Bolli.
For reference: 6 month cash chart at COB yesterday
