The ES continued it’s low volatility ways as the markets wait on the FOMC announcements and press releases tomorrow. Apple was a wild card; there was no telling if or how the markets would react to Apple’s much anticipated iPhone 5. There were not real surprises coming into the event and the markets ended up yawning.
I don’t have an order flow example trade today. The ES stayed in a 6 point range most of the day and never reached the outer edge of a DTG level. Instead, today’s example trade is an example of one way to trade in low volatility; fade the edges of a well defined range. The ES is pinned against a multi-year high and it will take some changes in trader expectations to rocket price higher. Maybe a product announcement from the huge market cap Apple could do that, but it’s doubtful. The markets want central banking stimulus and the FOMC tomorrow can deliver (or Not).
By early afternoon, the ES had established an intial high and low for the day. The 1439 high was only 3 ticks under the multi-year high. Price double topped at 1439 providing an opportunity to short the edge of the high of the day and the multi-year high. Price ended up rotating back down to test the low of the day which actually provided another opportunity to fade the day’s range.
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