Nov 302010

Yesterday was a bullish reversal day and then overnight we drop back down near yesterday’s low. That doesn’t seem bullish to me.

One hypothesis is that ES may try to break below the multi-day trading range (green arrows). If we poke down then I’ll be interested in going long near yesterday’s low & CLVN at 71.75 with a target of CHVN 1179. If we rotate around CHVN 70 then I’ll look to trade both sides if balanced and if imbalanced (strong selling) then short only from CLVN 71.75. I’m not sure we can break out without a pullback back into the range so that’s why I’ll look for longs if I don’t see strong selling.

Now I force myself to come up with a bullish scenario. If 71.75 holds then I’ll should be long until 79 (dark blue arrows). If we continue higher then I’ll look for a pullback to get long. If we stay balanced then trading will be limited as that’s a very high volume area on the composite and likely to be choppy.

There are some news releases today at 12 minutes & 30 minutes after the open.  The PMI has screwed me before, I always forget it’s released early to subscribers.  Someone just mentioned it on Twitter or else I would have forgotten again.  Forex Factory should use the subscriber time for the news release.

A note on avoiding CHVN’s.  This morning I took a trade there.  My plan is I can fade the first move to the CHVN but after that I avoid it.  The first move can be rejected but if it isn’t or if it returns then acceptance & rotation (chop) is likely.

Forgot to mention we have a Gap down of 10 pts.  That’s a nice sized gap.  What’s interesting is there were no sellers there leading into the close, they came after.  A gap fill is always a possibility but my bias is still down until I see strong buying.

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