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8:10 AM est
outlook for today: nice run on es from 1296-98 support. at prior resist from 2/27. will watch for some selling today back to 22.5-24.25
pre-open to 12:00
Yesterday, we were buying the ema. With a sell bias for the day, we would look to sell the ema. Selling began at 31.5 (+2) prior to the unemployment news. It is common to see 1) a run before the news or 2) a move before the news that traps "bandwagon" orders when it reverses with the news.
The second entry level was at 29.5 (+1 be) when the 9am area showed a lower high. By b460 a bullish channel was identified, and it hit our stop with the bullish b463. We had a pre-open support at 1328, and still has the possibility that the upper TL would be broken as was the case Thursday. But the 3m channel failed, and we see lower highs recorded on the 8m chart when the market opened. The open produce our 3rd trade with another 29.5 short (.5, 2 , .5) stopped out on b4.
We remained on the sideline, noting the support at 26.5. B10 was an inside bar followed by our signal b11, a Small body bull trapped at the ema (MAXT more on that in a later post). Our entry was b11-1t and it hit on b12 ( 2, 5) with a b16 exit. Stops are generally move toward the 50% level of the prior bar in an extended bar run.
When playing the ema, we look for trapped bars- MAXT (close at/near ema) or short/long extended bars at the ema which are quickly reversed (XRB). The first case was at b11, and the latter was at b44-45. This setup calls for a short at b46 (22.25) with exits at b53 and b56.
Afternoon Trading:
We generally do not trade the mid-day US market, but around 13:40 we do see a reversal b84 with a short at 14.75.
Our last short of the day was b112-1t (16.5) with the exit at b117(+2.5 +3). The 8m chart was showing a divergence suggesting the bearish PA was over extended. Last trade of the day was long b123 (13.5 +2 +4.25).
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