A few days ago I posted about the Euro being at a key area. The level was a 62.8% fib re-tracement of the entire bear move down, backed by the composite VPOC. The Euro broke through both and was consolidating on Friday. Since these high prices were accepted rather than rejected, I expected ES to test the 1300 area. However yesterday a string of news events came out and that sent both the Euro & the stock markets down.
One of the news items was the decision by Greece to have a referendum on the EU bailout package. It is not expected that the Greek population will vote for it. The average Greek is not the one who wasted all the money and blew up the deficit so why should they pay? If I were Greek, I wouldn’t vote for it.
The markets had a huge run up so it doesn’t take much to spook some late longs into bailing and that spooks the early longs into profit taking. Hence we get long liquidation and that can pave the way for a continuation up. It all depends on the news and what the Euro does.
I’m not swing trading the Euro or ES so this is all just speculation for fun. I’ve been taking my day trading setups as they come and I try my best to forget about all this market outlook stuff while day trading. I am just looking for support & resistance areas with good trade location and letting the R:R take care of it.
I apologize for the lack of updates. I’ve cut back on my trading hours and have been very busy with non-trading activities. I will continue to post to the blog when I have some free time during my trading hours. For example as I’m writing this I’m waiting patiently for my target on my ES short. I find it’s much easier to be patient if I pre-occupy myself and not become enchanted by the DOM. Pre-occupations include playing music, working on a programming project (trading-related), or reading.
In this case I waited for a good trade location on a short which came when ES pulled back to its DVPOC just short of the European cash open (dotted green line). I put on my short, scaled half at +2 pts and set the target for the lower HVN thinking ES will fill out this profile. I trail my stop to lock in profits.
This trade is a good example of what I’ve been doing. It’s really all about picking spots and being patient enough to wait for them. My losses come from when I invent trades and/or take trades in bad areas. If I can just reduce these mistakes my PL would improve considerably.
Good luck with your trading.