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.
Wednesday's ES trade was a choppy affair early on. Fed chairwoman Janet Yellen was due to speak at 1115 central time and the result of that was a market dominated by chop in the early going. The theme of the day was to be cautious on the short side and look for long entries from levels below. Off the open responsive sellers stepped in above Globex hi and started a choppy push towards Globex low and a weak attempt at gap fill.
I mentioned in the market preview that aggressive traders could look to half gap for trade to the upside and that trade was worth 3+ points from the 1842 1843 level. Sellers continued to push down after that brief rotation up but were unable to get to gap fill with responsive buyers stepping in one take and for the 1850 1839 support resistance zone.
The reason for caution to the short side was because the market has driven up without fail prior to Janet Yellen making public comments. True to form ES rotated from approximately 184075 up to 1852 in the hour prior to her comments.
This is the reason why I was avoiding the short side of the trade today and even if a trader was unable to position to the longside; simply by avoiding the short side, significant losses and frustration was avoided. Avoiding a losing trade is just as valuable to me as having a winning trade.
The market traded sideways after Yellen speech and was squeezed to new highs by the end of the day but not before finding rejection of the first touch of the 11852.75 to 1854.75 support resistance down that yielded a two point rotation lower before continuing to the high the day.
Today was a balance day that rewarded patient slow trading. ES has now retraced to a significant resistance point. Tomorrow if the market is unable to trade and hold above 1855 it is likely the responsive sellers will step back in make a push back towards the 1814 to 1816 levels were lower.
Keep in mind tomorrow is the last day of option expiration and we could see a large amount of volatility in the first and last hour the day. I hope everyone had a great day. Remember all you need is one or two good trades a day to build a solid trading account.