Jul 262010

The market opened in our 1.50/2.75 area and rotated around Friday’s close waiting on the 10am new home sales report.  At 330K, the new home sales beat expectations and sent the market into our next 4.25/6.50 level where it began rotating.  Buyers push the market above 1106.75 and tried hard to keep it moving.  It became evident that those traders could be trapped and it was worth a short trade.  It took a long time (over 10 minutes :)) for this short to develop.  Finally, the trapped trader’s stops started getting hit and the ES tumbled down through our target.

For the rest of the day, the best trade opportunities will be the levels above the current high of 1107.50 and starting with the 1097 level at the OL.

 Posted by at 11:04 am

  2 Responses to “7/26/2010 Post Trading Analysis”

  1. Thanks for the fantastic blog guys. I traded that area also yesterday. I am not a subscriber to your morning preview but it gives me a lot confidence to know I’m beginning to see the same things you guys see.

    Quick question: Whilst you were managing the trade what kept you from taking profit at the 1105’s? Though my in-experienced eyes I saw that level as resting limit buy orders sucking up all the selling. When it held there for around 9k contracts at the bid I assumed it would go higher as the selling wasn’t getting it done and bailed on the short for around 4 ticks.

    • There would be nothing wrong with taking profits at 1105. That was approximately the breaking point area where the buyers who got in around 1107 would start getting their stops hit so if price got below 1105ish a quick move down could be expected.

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