NQ1!, Nasdaq in a Breakout Mode
Updated
A gap up in Globex session set the futures into breakout mode across the board. The RTH session spent time processing this breakout and confirmed it so far. As long as the price remains above 7100-ish the breakout would remain intact leaving the buyers in charge. This is a typical market action. Usually, shorting is not advised when the market is in the breakout mode. But today, a short term top was established earlier in the session. Today's high is the Nov 8 close. Considering that the price moved up far enough from the previous balance it was ok to try a short setup when today's high was retested. The old saying: double tops/bottoms come first...
The ES came very close to its potential resistance 2820-ish. That helped to get on short side as well.
The price did not pull back enough to provide a good long opportunity. But it came close to 02/20 high. It was an aggressive long. But it worked only because of the breakout mode.
At this point we need to see whether the breakout is going to stick or not. I wish the breakout had a more pronounced action - like a trend up day. But looking at the big picture it is clear that there is a lot of supply in this area and we may see a slow grinding action filling the projected box. I expect that the Globex session would continue to do a heavy-weight lifting and the RTH session would digest it with a little to no advance. That's the nature of the current environment.
What I realized after trading in such environment is that one need to trade like a bot. Meaning, it does not matter whether the price is high or the economic data does not support the upside move. It is better not to think about it. Price respects the market structure. If the structure remains intact then a trade setup is there. This is exactly what the Algos do. Study a price action and you will see how they behave.
02/25/2019
The ES came very close to its potential resistance 2820-ish. That helped to get on short side as well.
The price did not pull back enough to provide a good long opportunity. But it came close to 02/20 high. It was an aggressive long. But it worked only because of the breakout mode.
At this point we need to see whether the breakout is going to stick or not. I wish the breakout had a more pronounced action - like a trend up day. But looking at the big picture it is clear that there is a lot of supply in this area and we may see a slow grinding action filling the projected box. I expect that the Globex session would continue to do a heavy-weight lifting and the RTH session would digest it with a little to no advance. That's the nature of the current environment.
What I realized after trading in such environment is that one need to trade like a bot. Meaning, it does not matter whether the price is high or the economic data does not support the upside move. It is better not to think about it. Price respects the market structure. If the structure remains intact then a trade setup is there. This is exactly what the Algos do. Study a price action and you will see how they behave.
02/25/2019
Note
Not much has changed from the market structure perspective. The Globex session had retested the February POC and since then the responsive buyers were active. The RTH session was quite balanced with POC 7125. The pullbacks are being bought so far. I did not short today, only a few long setups. The buyers need to hold 7100. The end of week/month is approaching and I suspect that the buyers want to finish in green. In the Algo dominated world something has to spook the herd to turn it around. 02/26/2019
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