Well after the announcement of new reform plans for some of the too big to fail institutions we finally broke out of this range. Market has been consolidating in box formations like the one shown above break out and trend and back to consolidation again, that has been the pattern since March.
Trades for today, jumped in on the short side breakout CONFIRMED by VIX and daily volume. Covered @ 1113 and reversed long. Had about 5 pts in my favor, moved stop to break even and got hit. Gave up some nice paper gains, risks of trading only one contract I guess.
I am currently long ES again@1109 and holding overnight, why you ask? well the box trading range we were in was approximately 19pts. Subtract 19pts from 1128 (low of the previous box) and you get 1109. ES traded 1108.50 and has bounced, so far have caught the low of this reaction within 2 ticks, that’s how we do things around here:) I expect a small gap up tomorrow as this is a low risk entry.
My current view is we are heading back down to close a gap @ 1097.75 pre-holiday. I don’t see the market trading below 1085, so bears please don’t get your hopes up on this one. Remember gaps ALWAYS get filled, we now have open gaps in the 1140’s from yesterday and today.