Thursday, August 2, 2012

ES - 2 August, 2012 closing re-cap

Pre-ECB ramp-up to the extreme 78.6% fib retracement of entire previous movement = Tuesday high @1383.

Disappointment at Draghi's announcement starts the sell-off.

TH opening ramp-up to 50% fib retracement (h.10:25), drawn from anchor point ECB high (validated by the 78.6% = Tuesday high).

Low of the day at -23.6% standard fib retracement of same previous 50% fib retracement =  -50%fde opening gyration (TH 60m OR) = RSI/price positive divergence.

Notable (see two charts above): when, at the ramp-up opening, the ES had reached the 38.2% fib retracement of the larger possible high-to-low, the $DJI had not yet. When the $DJI reached its 38.2% fib retracement (h.10:25), ES was @50% fib retracement of the smaller proportion and that was then enough to continue lower (i.e. $DJI proportion is leading).

Realized P&L was €1,890.

I end the day flat.

ES - 2 August, 2012 pre-ECB set-up

In keeping with the larger short bias portrayed in the Week-end review (23-27 July, 2012), I would initiate short positions, should the market reach the following levels:
 - 1384.75; and
 - 1386.5.

The shorts would be invalidated upon the Dow Jones Industrial Average ($DJI) breaching and staying above 13128.64 (Monday top), during cash trading hours.

On the flip side, I would split a long entry between 1363-1364, for a 3-5pts target.

Wednesday, August 1, 2012

ES - 1 August, 2012 closing re-cap

The reaction to the FED announcement brought the market to the bottom of a descending channel (anchored to TH high/low) = -23.6%fde.

Realized P&L was €700.
I end the day flat.