Once again, the expected move to 1230 happened overnight and we have a big gap now. A large gap opening from yesterday's close represents extreme behavior and often results in a trend day in either direction. But as I type this the gap is getting smaller, so it's very likely to fill now and then test after hours high of 30/R1 31.83
We are about to open with a large gap down. Days like these usually end up being trend days (up or down). Gap outside of prev day range and below S2 are less likely to fill. We have a report at 10 to watch out for The levels for today are 1180-1185 at the bottom and 1225-1230 at the top potential longer term reversal level is 1150-1170 range.
The market has an up gap now and upper levels for tomorrow are 1205-1215. 1206 is last weeks low and around 50% of the gap and 50% expansion of today's range We have 8:30 GDP report that can change everything the lower potential level is 70-80 we should get into positive thanksgiving low volume seasonality tomorrow.
We've changed from a gap up to a gap down and probably will test YL. 2d gap in the same direction has a high probability of filling. We had 2 days of congestion, so the odds are we are going to have a trend day today.
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1180 is a weekly PP and last month mid point, so an important level to be tested. Could happen tonight. 1206 level was tested last night and found sellers, but it's an important level that's likely to be tested during regular session. 1210 is also weekly R1 there is a potential down gap for tomorrow, but lots of reports tomorrow morning, so anything can happen. Most likely range is 80-85 to 1203-1210 If 75 doesn't hold, then potential retest of last week's low.
82 did hold overnight and we had central banks intervention overnight and a huge gap up that blew way over my 1210 target, but that was a "normal" target, not intervention target. Either way 1236 is last week's high and next upside target and we came pretty close to it already. from here, I think, small pullbacks will be bought by trapped bears and eager longs and tight range is likely. So the plan for the day is to scalp good set ups at the range extremes after the range is established. we still have 2 reports coming up at 9:45 and 10 and beige book at 2:00 pm. The possibility of a reversal is small, we need a strong trend line break to MA first.
I think I need to reiterate a point to myself -- don't short this unless there is a very strong evidence of a break down. It's just so seductive to short this because it's ran up so high, but that is not how I trade. The goal for today is to work on my discipline and not get influenced by my emotions. I rather miss a short then take it without my set up.
Well, looks like my discipline failed today and I didn't follow my plan that I've outlined. I did place too many shorts today without waiting for a proper set up because I was afraid to miss the sell off. I need to work on my discipline and patience and stop trading what I feel. Will read the Discipline Trader today.