Sep 202013


Today was supposed to be a quiet day…  There were no economic data releases and true; there were a battery of high level Fed personnel making lunchtime speeches, but Bernanke did ok in his last press conference and damage control was not needed.  Also, today was quadruple witching however given the Fed announcement on Wednesday; surely most institutions have rolled over they positions by now.  Therefore, I was expecting a slow morning of consolidation with maybe some directional movement later caused by Fed elite comments.  It turns out that Bullard did make a comment that tapering may start in October if the employment numbers are strong.  That’s all the market needed to erase Wednesday’s “no taper” rally and turn today into a trend day.

The ES opened and quickly moved into the DTG 18.25 short level where it turned and started heading down.  The price action was there for a short opportunity, but the order flow was not.  It took most of the morning to grind down into the DTG 12 long level where the ES had a decent bounce up to the VWAP.  The retests of the strong 12 area were shallow and institutions started buying.  The trade obviously didn’t pan out as a winning opportunity, but there some lessons to be shared on the annotated chart below.  

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