Wednesday 03.04.2015 ended up being a nice cup with handle formation on the OFA 6/4 chart. We opened at 2098.75 with an opening swing high at 2099.50, which also ended up being the IBH of the day and an opening swing low at 2097.75. We had immediate weakness and once we broke the prior closing swing low at 2096.25 with momentum, we dropped all the way to S2 at 2088.50. I was amazed how weak the market was and there were at least 2-3 great trend continuation pullbacks in there to get short. My trading plan had a short on a re-test at 2100.00, but during the first couple of hours we never got there. We retraced back into the volume cluster where sellers initiated trade from 91.50 - 92.25 and exhausted right at 92.25 - great short opportunity and we fell all the way to the new LOD at 2085.25. The volume profile had a nice finish to the downside here and we started compressing back up. Not easy to trade really. Once more we tested into the volume cluster area and once again exhausted at 92.25 but were unable to drop much lower than 87.75, where we exhausted on the sell side. S2 now started acting as support and we finally blew through resistance at 92.25 with momentum and left a low volume node behind. We will be watching that node tomorrow for a potential long. We formed volume above 92.25 and tested it only to exhaust there and then moved higher into the next volume cluster area where sellers initiated sell orders in the morning from 96.25 - 97.00. S1 was at 96.50 so we exhausted there on a test but only fell back to 94.25. We pushed through the area all the way to 98.50. We gathered the strength to push once more to the IBH and HOD at 2099.75 and there was the short. We formed volume right below it with responsive selling and eventually dropped back to 92.50! From there we ground higher into the close at 2096.25, with VPOC at 2096.50. The cup with handle would technically mean that we move higher. We have a whole lot of econ #'s tomorrow plus FOMC Member Williams speaks. Claims are expected to come in better than last time, so that has a bullish notion to it. Currently 2100.00 is the line in the sand. If we get above it I expect the market to trade back to 2120.00 area, if we fall below it, 82.50 and then 73.00 are in the realm of possibility.
Trade Scenarios
Scenario 1
If we trade back to 2092.25 (LVN) I will look for a long there with target 2096.50 (PVPOC). Should the trade fail, I will look to go short on a re-test of 2092.25 (LVN) with a traget at 2090.75 (CHVN).
Scenario 2
If we trade through 2099.75 - 2100.00 (PHOD/LVN) with buyers initiating trade (BIT), then I will look to go long on a re-test of 2099.75 with target 2102.75 (127.2%). If the trade fails, then I will look to ho short at 2099.75 area with a target at 2096.50 HVN/PVPOC.
Scenario 3
If we break below 2085.25 (PLOD) I will look for a short on a re-test of that level with target 2081.25 (127.2%) / 2082.00 (LVN). Should the trade fail, I will look for a long around 2085.25 with target 2090.75 (HVN).
Executed Trades Evaluation
Trade 1
Type: MBT (Momentum Breakout Trade)
Short at 2091.00
Exit at 2089.25
Result +7 ticks
Notes: Market opened super weak and I missed 2-3 short trades TCP and MBT shorts. DOM looked super weak and I went with my gut feeling. Then we dropped to 89.25 (+7 Ticks) and even 89.00 with 524 weak sellers and nothing.
Above were 3082 strong sellers - very large number and market didn't move so LMT buy orders were holding. Again I felt
to act and get out and I got out. Then went up 6 Ticks and then dropped again after 2 rotations.
Now balancing.
Trade 2
Type: MBT
Long at 2094.75
Exit at 2095.50
Result +3 ticks
Notes: DIDN'T LIKE IT! Got in thinking it would go higher - had missed my initially planned long trade from breaking the
board at 92.25 through vacuum to 93.25 for a point. I missed that. Then took another long MBT at 94.75, expecting us
to get to CLVN at 95.75 and took +3 Ticks and that was exactly all …