The 10am EST Consumer Confidence Report blew away expectations and the markets did react positively, but didn’t have enough change in trader expectations to push through the DTG 56 level. Low volatility settled back in and it looked like it was going to continue today. Then during lunch time, a comment from the Philly Fed president Plosser got picked up by the media where he said the Fed bond buying won’t boost growth or jobs and may jeopardize the Fed’s credibility. Well, duh… The selling started and volatility really picked up. The ES cut through 3 DTG levels before finding support at the S3 pivot. There were no order flow setups on the way down (although I’ll have to admit that I anticipated a long setup in front of the DTG 43.50 level). Once 43.50 was broken, price started to tumble as a wrote about several times last week in the chat room. The ES was trending down, so it was time to look for a way to get in on the trend. Today’s example trade was such an opportunity.
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