Capture the Flag
Odds traders who played the opening bell for the gap trade were disappointed.
I was not one of them.
Our plan was for conservative traders to look for a lower low to take out the early longs and catch the late shorts.
We expected range trading, as a result of the overnight launch stripping away part of the move.
Last night’s post alluded to some of our potential targets, and that testing gave us the idea for primary trade being accomplished, in an orderly rather than chaotic fashion.
Trades need to be put into context; weigh the evidence for both sides and decide what makes the most sense.
We remarked that a bear flag may be building after the 87.75 print. It is a common pattern, and must always at least be considered when price is falling.
Price often moves the same way. There was an attempted first hour breakout today (capture the flag), then the market pulled back and eventually attempted to get back behind it’s line (92.5 to 93.75). When 92 breaks it re triggers the potential test of the Angel at 90.25, and then any day low. We advised tightening up stops or capturing profits when the price came within a point of the low.