No trades today. RG could not trade this morning and no setups were available. Price did move down back into the 1201.50/1202 area and was setting up nicely for a potential double bottom long trade, however it was just too close to the 9:55am EST Consumer Sentiment report. Once the report hit, the market became very volatile and trampled both the 1201.50 long fade level and the 1201 short break-out level. I waited for price to move back up into the 07.50 area for a short fade setup, but it never made it that far. It elected instead to use the overnight POC and VPOC at 1206 as resistance. The market will sometimes use the POC or VPOC as a rejection area, however we prefer low volume rejection areas trading rather than the middle of high volume areas. Price just moves easier in low volume areas than high volume acceptance areas.
Whoaaa, something just happened as I’m writing this; the market just took a nose dive. Let’s see, Goldman Sachs just announced they misstated some facts and the SEC is charging them with fraud. This is one of those events that happens occasionally that’s just a fact of trading. If you were in a trade, you had a 50/50 chance of being on the right side; a good reason to mind your risk to reward ratio for each trade.
Have a great weekend!
NJ UPDATE: In the rare times that we have run away markets like this, you just have to trade with the trend; pullbacks or breakouts do not matter. I missed most of the move down but I was able to take the pullback at 11:17am EST for a quick 2 points.
RG UPDATE: I was sick this morning which worked out well as I had no interest in 1201/1200 in either direction. If not for the news I might have sold under 1200 into 99 or 98 but the 10AM news timing was off. But the nice surprise was the Goldman news. I scalped long in the selloff just now at key rejection areas 94.50, 89.75, 89.25 and picked up three ticks after all. I wish this happened every day. Contrarian scalpers dream market…