Apr 222013


It was a light report morning with only the existing housing number at 10am EDT.  The ES had moved up during Globex over Italy’s elections and the G-20’s thumbs up  for Japan’s most recent easing.  Thus the bias coming into the open was slightly bullish, but as I posted in chat, I thought there would be a good chance the gap back down to Friday’s close would be closed some time today.

The ES opened on the R1 pivot, treating it as support before price moved down.  Price then moved back into the R1 and DTG 52.50 level where buyers were absorbed and trapped.  Unfortunately I was not focused enough to see the reversal and missed the short opportunity.  Next up was the DTG 47.50 level.  The ES bounced off the level and created a double bottom with good buying order flow.  This opportunity became a coin flip as the 10am housing number was released.  The number missed expectations, which after a show of some strength after the initial reaction, price moved down to new lows turning the opportunity into a losing trade.

The next level was the DTG 42 level.  The ES bounced off the level and sellers tried to work through it, but eventually the buyers were finally able to get some traction and provided today’s example trade opportunity.

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