Jul 082010

The ES opened beyond our first LVN area of 65.  After a rotation down, it moved into our second 66.25 / 68.50 LVN area but unfortunately did not provide up with a shorting opportunity as the ES rotated all the way down to our first long fade area.  The ES touched the 60.25 LVN edge and rotated back up.  On the next push down, the sellers came in hard around 60.75, trying to push the ES to new lows.  This developed into a classic case of trapped traders.  The buyers took over at 61 which pointed to a good long entry situation.  After grinding around for a while, the ES finally broke above 62 which triggered the many of the trapped trader stops and propelled the ES up.  I marked up the chart below to show the trade.

 Posted by at 11:10 am

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