Afternoon,

Another interesting day at the fishing pond. This was a day of two different markets. The DOW, S&P 500, were weak and the Russell 2000 and the NAZ were relatively strong. As we have stated many times, when the markets are not in sync, the markets become more difficult to trade.

The first potential set-up was a trader’s trick set-up after the break of the last 2 TS pivots of yesterday. The problem with the trade (at least for me) was the 161% fib level (as measured from the TS point 1 at 14:42 pm CST and the TS pivot 2 at 15:15 pm CST yesterday was less than 1 point away from the short entry. Here is the chart for the 1st potential trade.

Potential Trade 1

Click on chart to enlarge.

The first actual set-up was a trend line break followed by a traders trick set-up. Notice on the following chart how the price was held in by a trend line. That was a good resistance area. Also, there was an inside vertical bar at that same area.  That made two good reasons to take the trade. The time of the trade was at 10:18 am CST with an short entry of 734.10. Here is the chart for trade 1.

Trade 1

Click on chart to enlarge.

The next trade was another trend line break followed by another trader’s trick. The time was 11:21 am CST with an entry of 734.80. Here is the chart.

Trade 2

Click on chart to enlarge.

Let’s go over the thought process for managing a inside vertical bar. There were two IVB’s right at the 1st hour high after price tested that area earlier. If you shorted the second IVB at 12:21 pm CST with an entry 736.10. The price sold off and the trade was up nicely. Then there was another large IVB. A trader should have moved the stop to 1 tick above that bar at 12:27 pm CST with a moved stop to 736.00. Then go forward one 2 minute bar and there was another IVB. Again move the stop to above the bar at 12:30 pm CST with a moved stop to 735.90. The market finally dropped off and made the 2 point objective. Here is the chart of the trade.

IVB Chart

Click on chart to enlarge. 

Then there were 2 back to back trader’s trick set-up. The first was a 12:51 pm CST with an entry of 734.50. The trade was up 1.80 points and the stop was moved to break even. The trade broke even. The next set-up was at 13:06 pm CST with an entry at 733.90. Here is the chart for those trades.

Trade 4 and 5

Click on chart to enlarge.

The next trade was a IVB at 13:24 pm CST with a long entry at 730.60. This occurred after the price hit the 127% fib area as measured from the TS pivot at point 1 at 10:54 am CST to the TS pivot at point 2 at 11:39 am CST. The trade went up 1.40 points then went down and then back up to make the objective. Here is the chart.

Trade 6

Click on chart to enlarge.

That was the end of the trading for me but I want to show you one more trade that happened right after my personal  trading cut off at 14:30 pm CST. At the end of the day, the price pulled back to the 61% fib level as measured from the TS pivot at point 1 at 13:21 pm CST to the TS pivot at point 2 at 14:21 pm CST. There was a IVB at 14:39 pm CST with an entry price of 731.80. Here is the chart for that trade.

Last IVB Trade

Click on chart to enlarge.

So not including the last trade, there were 6 valid set-ups with 5 winning trades and 1 break even trade for a net profit of $1,000, ignoring slippage and commissions.  This all happened on a day that the total range was around 10 points.

I hope that your are enjoying the new IVB. As long as you really look for strong support/resistance area to take a IVB trade and monitor that trade very carefully, the set-up has the potential to make more than my 2 point objective and really make fishing more profitable.

Best regards,

Ron

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