OUTLOOK: The bias for Tuesday was determined last evening. While PA was in the 1310-11 range, we discussed the move to 1318. This would be near the mid point of a longer term trading range, and would act like a magnet with the long bias. The ema was near, and we would look for a maxt setup. However, most of Tuesday was expected to be in the upper region.
As we approached the pre-open trading this morning, it was clear the long bias was in play. The positive channel led us to 1318, and we noted the bo attempts, and would consider shorts below 1312.
MARKET OPEN:
9:16 POST TO THE ROOM: the expectation today is another challenge of 1318. The flip side, we would look for a bo of 1308. This led us into or first trade, a long at 11.75, which gave us a +1 and be at the protective stop. Selling pressure was noted and we played into the push down with a 10.25 short for +2 and stop exit at 9.5. A note on trades. No one can promise you the top nor the bottom. The short continued without us. That's PA and part of the business.
For the next trade, we discussed the b9 area in the chat room. b9 pierced the ema, thus no maxt for a short. The thinking was, this was the second attempt at 1318. A long was entered at 10.25 (+3 +4) and it was productive for us.
XRB's were coming into play, showing upward resistance levels. However the 3m ema and the 8m ema had remained a strong support. On the second maxt a long at 17.5 (+5 +4) was entered. The A.M. session ended for us with a XRB short at 24.5 (+1 +.25 stp).
This trade had a tighter stop due to some interruptions. If you can not see the chart or are experiencing a distraction, get out of the trade. This trade had excellent potential when you look all three ema's.
Left to right, 2 point range chart , 8m, and the 3m. Each chart was showing the XRB setup, and each had attractive ema's for the price run. PA actually ran to the range ema around 1320. Again, good read, good trade potential, but you need to be an active trader. Do not run a trade you can not manage.
PM TRADING:
There was a nice TL BO at b422 (3m) followed by a TR (trend reversal) and TRT ( trend reversal test) at 1320. The last trade of the day was a long entered at 21.75 (+2 +1.25) as the PA pierced the ema- ie was not a maxt setup. However, a maxt did appear at b444-445 that provided buyers with a productive move to the XRB.
All-in-all not a bad day playing the long bias and staying with those trades we find more productive.
MAXT- moving average exhausted trap PA that stops at S/R. The market plans to continue the trend prior to the maxt. The trap is for those traders entering the micro trend that causes the maxt. Those traders are trapped on the wrong side, thinking the micro trend turns into a major trend, and their exits will fuel the payoff move we enter.
XRB- An exhausted bar in a trend followed by a reversal bar. The typical entry will be 50% of bar 1 or b1 - 1t. The thought is: PA that breaks above the first XRB in a trend will hit a second XRB, and the second XRB will return to retest the XRB-1 levels.
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