Apr 172013


After two trend days, I came into this morning thinking that the markets would take a breather today and find value somewhere in back in the 1530 to 1568 range it had built during March.  The reports were light today with Oil at 10:30am EDT and the Fed Beige book at 2pm EDT.  The European session had erased most of yesterday’s gains which gave the ES room to move either direction.  Shortly after the open, the ES dropped into the bottom of the DTG 52.50 level where it unfolded into a head fake bottom before it climbed back through the level.  The head fake is a powerful price pattern because good moves come off of it when it works.  The trouble is, I view it as riskier than double bottoms or low failures and I found myself hoping there would be another retest of the LOD (low of day).  That didn’t happen and I missed the opportunity.  The ES offered a couple more opportunities in the the DTG 52.50 level and I’ve annotated the chart below with my thoughts.  The next two opportunities did not move far enough for profits and would have produced losses as the ES started to tumble down to the DTG 43 level where it had an interim blow off bottom and another long trade opportunity.

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