A SIMPLE APPROACH TO GAINING CONSISTENT RETURNS THAT ANYONE CAN FOLLOW. NO HYPE, NO BS, TRANSPARENCY DAY IN DAY OUT. 1 GOAL, TO MOVE TRADERS FROM BREAK EVEN/LOSERS TO CONSISTENT WINNERS. ITS NOT FANCY, JUST EFFECTIVE.
Today's trade plan called for caution on the open due to the upcoming fed chairwoman speech at 8:55 AM. The most likely course for the market to follow after the open was to drive up in anticipation of that speech and that is precisely what occurred. After clearing Globex high ES traded to the initial resistance at 1866.50 where we found responsive sellers. The Sellers were able to push ES down for a 7 point rotation and a backside test of Friday's high. ES was much stronger than the NQ; which had difficulty sustaining above Friday's highs and was generally weaker the entire day. The move into Friday's high trapped late sellers in ES and provided fuel for a move up to the initial resistance where we set a marginal new high before Sellers once again stepped back in and gave us the rotation down to Globex high.
Essentially today's move was stolen before the market opened and we were left with a choppy market that was in balance. It is very easy for retail traders to get chopped in an environment like this. Breakdowns tend to get bought and breakouts tend to get sold on balance days. The easiest way to play this is from the outside back to the middle. Conversely the middle of the range tends to be the worst place to initiate a trade.
Overall ES was much stronger than NQ; which found significant selling pressure in the last 15 minutes of the day. I had pointed out in the market preview that NQ has been significantly weaker than ES and that it has been leading ES lower and higher for the last six months. The last two trading days we have seen ES hold up much better than NQ. It is possible that ES is becoming the new market leader which in my eyes could set us up for better two way markets moving forward.
Overall the zones provided great trade location and a significant edge on both first and second touches which is very common on balance days.