As I wrote yesterday, I’m watching both Bund, Stoxx & ES. I’m short the stoxx with a partial position left.
The bund had two negative days but still manages to stay inside it’s balance area. It’s now testing this in after-hours trading (currently at 123.75).
First, this makes a great long setup so I’ll be looking for a long tomorrow, with 124.10 & 124.60 as targets.
Second, if the bund gets accepted in the previous balance area, then I’ll look for a short with a target of 123.70 and then 123.51. And that will also be a warning that ES could bounce up. I still think ES will test the gap I mentioned but lately I’m forcing myself to consider all alternatives. Can’t be too prepared.
Today’s action in ES was balanced and that’s to be expected after a monster move down. The move outside this balance will be key. And we can balance some more too.