Just as I said in the pre-market commentary, the majority of the market wasn’t ready to run it up too far right off the open, fearing the good news was potentially priced in. But the bottom line is you have to key in on what I said about the selling tail from October 08. NOBODY has any idea what any of those prices north of 56 in through the 60s mean as they have no recent trading there and as such no clear support or resistance. So ANY prices can either be bullish or bearish and can be run over quickly or massively rejected.
That said, we sold the first push into the high on order flow, but the order flow didn’t hold so we just took 3 ticks on it and bailed when more buyers stepped in hard. We also sold the second push into the low 60s on the failure, again for 3 ticks. This was again an order flow trade all the way. We had an initial target of 57.25 on that one which was the ON point of control, but the buyers started hitting the offers a little too hard for our liking and we had to bail on that one for 3 ticks as well. All in all, the fades were about what we expected and we are pleased with the way we felt our way through it and profited.
Some will surely ask why we didn’t trade the break above 60 and I have a good answer for you: I just didn’t like it because of what I said earlier about all those “skipped over” prices from October 08. I really want to see some volume somewhere on my trades so I can get a relative sense of where to get a foothold in. I just felt like any rally in the low 60s could stop anywhere and I was right as it turned out. The market clearly has no idea what it wants to do. That coupled with the fact that I generally like to trade reversion in this market for very real statistical reasons is the rest of the answer. Here is a snap of where the first trade was: