Thursday, July 26, 2012

ES - 26 July, 2012 pre-opening set-up

My take on what just happened following ECB's Mario Draghi bullish comments.

The market had reached the support given by a previous top @1327.75, coinciding also with a corrective pattern measured by the 100% fib extension of an abc drawn with the pivot points of yesterday's reaction top @1339, subsequent low @1330.5 and Globex high @1336.5 (see chart).

That abc was enough of a correction when the market-moving news from the ECB came in.

I have just downloaded my long position @1343.5, in order to play the 8:30 news and US cash opening freely.

Update 1. it looks like I left a lot on the table exiting @1343.5. Even though my bias remained bullish, I thought I could be better off playing the gyrations of news and US cash opening, but I might have to conclude that I have underestimated the reaction of traders to Central Banks, which I have witnessed in the past, and the thrust of a potential wave 3, according to the count that I was following (and that is visible on the chart).

Update 2: Draghi's comments were released at 12:22CET, while the ES touched the low@1327.75 at 11:06CET, a full 1h and 15min before the supposedly market-moving news. This is reinforcing my opinion that the market had already done a correction sufficient to resume the up-trend.

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