It turned into a brutal day for fade traders as the DTG levels became bumps in the road to tumble the ES would take. There was little economic news for traders to evaluate with only the Oil report in the morning and Treasury budget in the afternoon both of which have not been market movers lately. In retrospect, the ES did start it’s last leg down around 2pm EDT which was when the Treasury budget was released, but the break down seemed more a continuation of the trend than initiated by news. After the cash open, the ES climbed to the front-edge of the DTG 38 level where it unfolded into a potential short opportunity, but I was still scrambling at that time with lining my ducks up and missed the opportunity. I recognized it after the fact and posted to chat “if price can clear the 34 area, it should move down to the 26 area.” However in the meantime, the DTG 33.75 level was providing some support and a long order flow opportunity unfolded. This opportunity was only able to get about 2 points of traction as price bounced off the VWAP and tumbled to the DTG 27.75 level to bounce off 26.25 (one tick short of 26). Once again a long order flow opportunity unfolded which is today’s example trade.
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