Like a left-over hangover from the holiday party, today’s expected pullback left the late longs in trouble from the opening bell, and punished those who didn’t understand the timing.
Yesterday was a suspected TSSD, and we hinted at that in last night’s blog that we felt the longs were vulnerable. That psychology proved to be true, and now the battlefield is set up for the “January effect” positioning.
As day traders, we want to get the direction of the trade correct, and take trend trades. As position traders, we can let them run a day or two until the trade plays out.
The conservative shorts never got entry in the first hour, and they were chasers the rest of the day. After the over night break, yesterday’s low never got tested during RTH, and say good night to the trapped longs.
Safe shorts are not usually easy because the bear jumps out the window.
Lunch chop had a few in the chat room scalping long, but that is a young man’s scalping game, and I prefer to take trades with the trend until major support is found. If something significant changes, or the EOD trade sets up, then the Angel trade can give a potential contra trade against the ID trend.
The 06 target was easily hit, and the next 02 03 level was also destined after the 14 magnet let go.
Although today’s trade could have ended at any day low (I had 94.75 as possible), Fibonacci traders found the 127 as a possible target and support at the 99 area, especially since it was late in the day.
97 support held for now, so patience until we see what globex does over night.