Earlier this afternoon a “tweet” came across my twitter feed, “why the hell is this bird flock flying in circles over and over again”. At the time, eMinis were approaching the support area around 1100. Given today’s Z day setup, the odds favored the lows holding, as the highs had earlier in the session. That is what ended up happening; the lows held and they had a lethargic rally into the close.
On a Z day, we look for the market to bounce back and forth off support and resistance. This should prevent us from “selling in the hole” or “buying in the sky”. If I wanted to get short today, the Z day would have kept me from selling in the low end of today’s range; I would have waited for the confirmation of new lows to get short.
Sometimes it pays to try to enter a trade early; but I would usually prefer to give up a bit of profit to wait for the market to confirm a setup before entering.
Bouncing back and forth
This is a sample of the analysis from my Swing Trader’s Insight advisory service. For information on STI, and to sign up for a free two week trial, visit here.
The information contained here includes information from sources believed to be reliable and accurate, but no guarantee is made as to accuracy, nor do they purport to be complete. Opinions are subject to change without notice. Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
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