Yesterday
Another great day close to what I was expecting. I said we ran a little too fast too soon and yesterday was the breather day the market needed to be able to sustain this rally. The short end of the trade worked out great as mentioned with the retest of the previous days high at the 865 range and of course the predicted sell off - you could have closed out anywhere on this short run with a few gains.
The long side carried risk just as I said yesterday - 845, 830, 820 (being the perfect entry). Since this was a breather day my expectation was at least hitting the 830 range - low of the day was 834, great call again but unfortunately not easily tradable. We had our battle of bears and bulls and towards the end of the day the bulls won and we extended our distance from the important 845 range. Very bullish sign again.
You can clearly see now that the bottom at least on the short term has formed and we are setting up for a strong rally.
Today
We have a decision day today, expect the move to be a bit strong with probably a 50+ point intraday range. We have to battle the 865 that in my opinion will break on the upside giving me the 900 confirmation I was looking for. We have had 3 good tests of this range, it has to happen on the next attempt.
How to trade this?
We have the luxary today to have a very low risk trade right at our door step. The 865 range is very important and I would expect a final test at this range today. Here we will either break to the upside giving us a great long entry or break to the downside, if we break to the downside we are guarnateed 40 points out of this run to go back to 820 at the minimum.
If we gap open below previous close today scenarios can change a little bit and risk increases dramatically. So lets hope for today being the decision day at our key range we need.
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