I had identified low risk trade targets for either a short or a long yesterday - it seems we may get our chance at the long position anywhere from 1012 ES towards 1018 today. I entered a long on EURUSD based on the below daily chart.
As you can see we are right at the 50dma for the dollar here so if there is a bull left in this market it should happen here. The EURUSD is a bit ahead of SPX here and currently at key support while SPX is a few points away (well a bit more then a few but you get the point).
Of course I believe we will resolve to the downside here but I will not let my belief dictate what is in the charts anymore. From a pure risk reward perspective, the long side is more favorable now then the short side - at least on the short term. From a bearish perspective, this is quite an amazing setup to be honest, a breach of 1016 SPX (1012 ES) will confirm that we are at least making a move towards the 965-930 range and a retest of 1012 should be in order after the breach so there is no rush getting too short too soon yet. As you can see from the above EURUSD chart - it becomes even more obvious what will happen if we do end up breaching this range - LOTS of opportunities on the downside which we all know moves faster and stronger then a drawn out bull cycle (of course with the exception of the amazing last 6 months - I wonder how many times I am going to keep on saying that).
So for today - the market has shown us what it appears to be doing - a potential breach of yesterdays low at 1026 but lets not get ahead of ourselves and wait for cash hours.
Just an FYI - I did get stopped out of my long position during overnight hours, I had created a rule a few months back to not keep stops active overnight but I changed this back to my previous rules as I am trading with my old system again which is much lower risk (but less potential rewards).
whipesaw from hell lol
ReplyDeleterather interesting though that EURUSD is still beaten down by quite a bit compared to the SPX counter part (yeah I know we had some overnight action on forex last night unrelated to SPX).
ReplyDeleteWill be interesting to see how this will resolve.
a little pissed at myself for being stopped out at the lod on ES (yes if I had kept my stops away during the overnight session I would not have a problem).
ReplyDeleteRight back to where we closed yesterday lol
short at 1038 and now stop at 1038. we may see bottom of the wedge at 1020-1025. then blast off the descending wedge
ReplyDeletealmost took that trade for a scalp there ... still waiting a bit here before initiating any type of positions. EURUSD leading the way a lot lower ... was quite surprised by this move lower here in the last hour.
ReplyDeleteRaised my stop to 1036.25.
ReplyDeletelowered stop to 1035
ReplyDeleteNCS is a steal right here at $1.85 and poised for a monstrosity of a short squeeze any day now. Mark this down. In for 5500 shares.
ReplyDeletewow that is quite a nice setup there. This could easily double if the market pops from here.
ReplyDeleteAnd sam, I hate whipsaw markets, considering we did not rally today this makes the case for 1012-1016 even stronger so we have a great trade waiting for us down there.
Not a bad risk/reward entry on the /ES here. Especially with the fed on the horizon. It will be easy to gauge when this bet is wrong. I'm staying out though. This choppy shit is driving me nuts.
ReplyDeleteyeap same here ... rather wait for better entries on the edge of the range (1012 and 1050+). The in between stuff can go on for a long time while the market is trying to decide where to go. And lets be honest - I am not counting out a run to a new high quite yet though probability wise this is much lower at this point. But I said the same back in July - where my stubbornness killed my account.
ReplyDeleteIt is funny that now when the market moves, we do not like it and few weeks ago, we were bored and praying for some movement. I am out of short. Like you said, better to wait for 1015 or 1070. the question is will we have resolve to go in the opposite direction at that time? It will be very convincing move.
ReplyDeletethis could set up for bull or bear move here. 1040.5 is MOB for the bulls to break above. Go short at 1040 and stop at 1041-1042. If stopped out buy at 1043 and stop st 1040.
ReplyDeletequite amazing how it recovered it all the way back here lol
ReplyDeleteand sam, we love those ranges, yes we get thrown out a few times, but having ranges back is good for any trader, bull or bear. As you will have more opportunities around specific support/resistance ranges and a chance to get out if you were wrong.