We had a lot of reports this morning and the shadow the the US sequester of automatic spending cuts that will go into affect at midnight tonight. Additionally today is the first day of the month and a Friday which both have recently been producing bullish days. However, because of the recent strong up trend days, the lack of follow through overnight, and the sequester; I came into the morning with a bearish bias. We started the day with personal income missing expectations which started the ES moving down into the cash open. As the consumer sentiment report was released at 9:55am EST, the ES bounced off the DTG 1499 level with the sentiment number beating expectations. Then at 10am, construction spending was down, but the ISM number came in very strong which added to the bullishness of the morning. My bearish bias was changed by the bullishness of the sentiment and ISM numbers. As I posted in chat, I thought it was now possible to close the gap back to yesterday’s close (13.25). A pullback to the S1 pivot area was the long trade opportunity I pounced on. Unfortunately, the buyers did not make a strong showing, so I won’t use the trade as an example trade.
The ES next pushed up through the DTG 10.50 level, closing the gap and pushing past into the the DTG 15 level. Price formed a nice top and order flow cooperated for today’s example trade.
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