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Berlin, Europe
Market Wizard
Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker: Interactive Brokers
Trading: Keyboard
Posts: 9,888 since Mar 2010
Thanks Given: 4,242
Thanks Received: 27,103
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The sentiment was indeed very negative, I saw that you posted it in real-time.
Now the correct conclusion would have been to go long, as the sentiment had been measured 30 min prior to the low of the night session.
Important: The night session could not move further at that time without the consent of the day-session. The ES during night behaves like a dog waiting for his master, onoy sometimes the dog pulls away creating a pre-opening trend.
Important also here: The Globex pivot S1 (1069.25) and a multiple fib line (1070.50) provided for support. This was nearly the exact low. Only followed a lower low a few minutes after the open of the regular session, when the ES went down to 1066.25 to shake out weak hands before reversing.
Of course, it is easy to comment this with hindsight. But even in real-time I am cautious, if there is strong resistance outside the Keltner Channel. The 15 min bar that established the preliminary low at 8:45 ET was a churn bar. This is a pattern that I have observed many times. The churning indicates resistance as traders exit their positions and buyers step in. It is the start of accumulation. The churn bar usually sits on a fib or pivot line (as these are used and become support by means of self-fulfilling prophecy). A small final swing then cleans the market before price reverses.
The same priniciple applied to the day-session. Price sitting on the same fib-line. As there was no important news on Monday, the cleaning operation occured shortly after the open.
Is your sentiment scoreboard used as a trend or countertrend indicator?
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