11/20/2019 ES Daily Recap
So in the overnight we see that we have been balancing in the previous Friday's session range after failing to break higher during Tuesday’s session. So going into today we had a neutral bias and had to watch real time to see what the market would do. The key area I was watching was 3120.5-3118.5 resistance which was also where we broke down from. If we had a swift rejection at that level and failed to hold momentum, it would signal weakness and it would be potentially a failed breakout attempt so it would be wise to avoid overstaying long side and take quick hit n run plays. Any quick pops in this situation would be shorted as the sell side would have an edge. The psychology behind this is that since the market lacks any initiative from buyers, the weak longs who were trapped from the previous sell off would have wanted out since there was no hope for them and would have wanted to get out at that point. However if we were to break above this area it would signal that the buyers have some strength and warn us to be cautious about taking any short fades too early and waiting for clear exhaustion. You generally never want to go counter trend when the market is strong as it is like jumping in front of a speeding train.
Going into today’s session we can see that we failed to gain any strong upside momentum and failed to break higher. Seeing poor highs forming early in the day we could see that it was a daytrader’s market and no big players in this market. So with that in mind, we can expect to be range bound in friday’s range. In these types of balanced days, you would need to exercise patience and look for good trade location on either side. Shorts would have been taken at the extremes of the highs on the profile from out of value back into value near the poc. Longs would be taken from the extreme lows back into the value area as well.
At the open we can see that we were dealing with quite a bit of chop from emotional buyers and sellers and we decided to sit this out and wait for a greater edge. Once things settled down and observing profile we can see that we were dealing with a balanced day by the bell curve shape of the profile. Basically how we played today was whenever price deviated from the fair value we faded the extremes back in for a decent amount of profit.