Afternoon,

The Russell 2000 e-mini’s gaped down today at the open and rallied aback to the area of resistance from yesterday afternoon. There was a potential trader’s trick set-up after a trend line break from yesterday’s pivots but the entry was right as there was new being announced so I passed on the trade.  The market then pulled back to the 50% fib area as measured from the low to high pivot of the day. The market traded in a sideways base forming a double bottom before forming a IVB (inside vertical bar). Long entry was one tick above that bar at 9:21 am CST with an entry of 738.30. The trade moved to the 1st hour high area before breaking that level and making the objective. Here is the chart for trade 1.

Trade 1

 Click on chart to enlarge.

The price went up to R2 (red line on the next chart) before setting up for a trader’s trick set-up after breaking the 1st hour high but since the R2 area was right above the entry level, I passed on the trade. There was another possible Trader’s trick trade at the 161% fib area as measured from the TS pivot at 10:30 am CST to the TS pivot at 10:51 am CST but again I passed on the trade because the market had run up so much and was running into resistance at the 161% fib area. The next trade happened after the market pulled back to another support level and formed another IVB at 12:15 pm CST with a long entry of 747.80. I am going to spend a little time going over the anatomy of a IVB trade at this time.  I have started putting my initial stop under the previous pivot low or 2 points, which ever is less. In this case, that pivot low was at 12:12 pm CST with a stop at 746.50. That made my initial stop only 1.30 points away from my entry level. The market moved down a little and back up creating another pivot that was higher than the previous pivot(where I had my initial stop loss). I moved the stop 1 tick below the pivot at 12:27 pm CST with a stop of 746.60. Again the market tried to rally and then came back down to form another higher pivot at 12:51 pm CST. I again moved my stop to 1 tick below that pivot at 747.30. At this point, the trade was risking only .50 points. Again the market tried to rally but only made a slight new high before forming an inside vertical bar. Since the market was struggling to go higher, I was expecting it to fail. I moved the stop to 1 tick below the IVB at 13:06 pm CST and added another contract at the price of 748.30(in another words, I would stop and reverse my long position).  I was stopped out of the long position at 748.30, locking in a small profit of .50 points and went short at that same level. The market sold off quick, fast and  in a hurry. Here is the chart for trade 2 and 3.

Trade 2 and 3

Click on chart to enlarge.

The market sold off hard and stalled at the 161% fib area as measured from point 1 to point 2 on the following chart. There was an IVB at 13:24 pm CST with a long entry of 744.80 with an initial stop 1 tick under the TS pivot at 13:21 with a stop price of 743.30 or a 1.60 point initial risk. The market rallied up and hit the 61% fib area as measured from point 3 to point 4 on the following chart. There was another IVB at that level. The long trade was exited 1 tick below that IVB at 13:45 pm CST at 745.80,  locking a profit of 1.00 points. The stop and reverse short entry was at that same price of 745.80. Here is the chart for trades 4 and 5.

Trade 4 and 5

Click on chart to enlarge.

The market went into a sideways base for the rest of the afternoon.

So for today, there were 5 valid set-ups, with 5 winning trades for a net profit of $750 profit ignoring slippage and commissions.

Again, today was a bit difficult as the NAZ was extremely strong and the DOW was weak causing very strong cross currents. Have a solid game plan make for easier trading.

Best regards,

Ron

This is not a solicitation to buy or sell. 
There is a risk in any investment.