26 Nov – Like a rocket then hits its orbit

Pre-open Scenarios

the market opened way above all the TLs and levels I had identified last night. It then saw more buying at the futures open and held on to its gains during the first hour. more buying followed at the cash open, after which PA got whippy and nasty with long wicks and no direction.

By the time I got to my desk this morning, my Neutral Zone had been far exceeded and a critical TL I had been watching had been burst through with a gap up on the Sunday night open.

What the market looked like at the end of the day

This is how the market looked at the end of the day on the 1-month cash chart.

PA in more detail – the M5 charts

The key points on these charts are:

1. The move is as if propelled by a rocket – buyers are buying like crazy – no waiting for pullbacks, not negotiating, just piling into the market. As each level breaks, the market attracts more and more buyers … most likey algos programmed by buy above the levels.
2. There are no KLs – apart from some short term fibs – and this makes it very hard to trade. The level that got the strongest reaction today, at the US open, was the 23.6% retrace from the Sept-Oct move. Otherwise, where else would the orders be? There is nothing clear for the market to aim for.

Rocket-propelled action is very different from ‘magnet ‘action. Magnet action is where the market is ranging mode and is attracted to KLs to collect the orders waiting there – it approaches fast but its as if pulled towards the level rather than like the action we see today – where the market accelerates away from a breakout level as new positions are opened.

How effective was my Neutral Zone? It was completely left behind – prices broke powerfully out of it but it didn’t help mytrading … except that  I should have known NOT to trade against it. How precise were my levels? All broken – if this happens I need to make new levels…

Strategy for today’s PA

Today was a day for trading breaks of levels – I had one great level at the futures open and another at the cash – and then waiting for good setup to short. But given the lack of KLs, it was a day for holding onto longs unless the market told me otherwise – in this case it would have been a move below R3

What I did

Futures session

08:01 Sell x 86 @ 11263 Futures open spike | P&L = -1R
08:01 Buy x 19 @ 11269 for H1 T break| P&L = +0.5R still running
08:07 Buy x 47 @ 11275 for J-Lo| P&L = 2R
08:11 Sell x 85 @ 11270 for M1 TL break by hand| P&L = -1R
08:24 Sell x 84 @ 11272 for M1 TL break by hand| P&L = -1R
08:38 Sell x 84 @ 11282 for M1 TL break by hand| P&L = -1R
08:46 Sell x 95 @ 11273 for M1 TL break| P&L = -1R
08:54 Sell x 95 @ 11273 for M1 TL break| P&L = -1R

From now on, no trade will be taken during the futures session – except irresistible H1 TL breaks – so any other trades that appear in this box from now on will all be mistakes.

Cash session

09:06 Buy x 45 @ 11314 for J-Lo| P&L = +0.5R
09:08 Buy x 83 @ 11316 for M1 TL break by hand| P&L = +1.5R
09:26 Sell x 85 @ 11325 for M1 TL break by hand| P&L = -1R
09:39 Buy x 84 @ 11335 for M1 TL break by hand| P&L = BE
09:56 Sell x  84 @ 11336 for M1 TL break by hand| P&L = +0.4R
10:15 Buy x 84 @ 11340 for M1 TL break by hand| P&L = +0.4R
10:24 Sell x 78 @ 11337 for 3Min Bolli| P&L = -0.1R
10:26 Sell x 95 @ 11336 for M1 TL break| P&L = -1R
10:29 Buy x 95  @ 11334 for M1 TL break| P&L = +0.5R
10:52 Sell x 78 @ 11345 for 3Min Bolli| P&L = +0.6R
11:08 Sell x 78 @ 11345 for M1 TL break| P&L = +0.6R

TOTAL = -2.7R

Today’s most gorgeous setup

TL break at Futures open and then again at the cash open (this didn’t trigger because the EA already had the other trade open). This was an easy trade given the PA context.