TRADING THE BREAK OUT TARGETS

Today was going to be a great day.  Not disappointed with the early trading, just a little miffed I had a power issue and missed  most of the day.  My apology to the chat gang.

 The breakout targets (BOT) worked.  As discussed previously, we are trying to run the trend that develops after the break.  The 6e works very well, and the ES has potential, just be aware that it will tend to test the targets before breaking through.  Another valuable point, a failure at a target should be viewed as an opportunity to enter the opposite position.  A perfect example was the ES long BOT failure which provided a short opportunity.  Stops (according to your risk) are used to provide BOT protection should it be a trap play, where price fails briefly, reverses, and continue the break of the target.

A brief disclaimer: With the loss of power, all discussion of potential trades after 11 A.M. EST. are hypothetical but based upon what is a best guess of how the trades would be made given our targets and trading requirements.


TODAY:  6E

6E had been selling since 8:15 AM EST, when we started the day prior to the US open.  The long and short BOT's were set. Then, RATS!  My power cord was in the other office.  Well, two hours are better than none.

Price headed for the short and bounced, showing support.  The bullish TL warranted an aggressive entry at the EMA+ just below the long BOT.  We discuss this in our chat rooms, and provided updated on adjusting the stop to run with the trend.

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Price retraced but notice it found support at the rising TL and the long BOT.  A flag-like pattern from b8 and the BOT/TL support is screaming long.  At a minimum, you should see a long at the EMA+ and the long BOT at b32 (12:05)  1.4250.  The TL runners would exit around 50% of b 37, approximately 1.4295-1.4300.


TODAY:  ES

ES had a bull control bar at 5:50 AM EST.  With a control bar, price is expected to trade inside that micro range an average of 4-8 bars prior to a break.  The long and short BOT's were put in.

As we got close to the US open, price was staying +/- inside the control bar, and was consolidating just below the long BOT.  The wicks and tails were telling a story:  market indecision. (the consolidating).  The first true test of the BOT was b6, a "resistor"bar.  This failure was a valid short.

A short was available at the EMA failure on b8, however it was the short BOT that we entered.

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A short was possible at the consolidating failure under the EMA-  roughly b10-14, with an entry 1t below the middle bear, b13.

A bullish TL develops; aggressive longs trade at the TL, with a conservative entry at the EMA+ on b32 running back into the long BOT channel.  A key short would be at b57-58 where we have a break of the long BOT-, EMA-, and the lower channel.  The followup HL was an acceptable long.