I didn't anticipate it. It was. I just watched it happen. 5 or 6 points out of an 80pt range are practically nothing. But even if one were to debate that, what I saw first and foremost was failure. A common mistake among even relatively experienced traders when viewing charts is to view them as a whole, then focus on a particular area visually to recapture what happened during a particular segment. This provides an extremely skewed vision. If one looks at a chart of yesterday, for example, he sees a tight and narrow trading range before the open, not of much consequence, certainly nothing to get excited about, much less prompt what would wind up being a 40pt downdraft. However, if one narrows one's view of the chart so that the right edge does not extend beyond 0938, he sees what he would have seen in real time, and it's a very different picture. The failure to reach higher than 45 at 0833 is rather dramatic, and the failure even to match it at 0853 is clear. This makes the retracement at 0900 an obvious short. Or one could view it all as The Dog That Didn't Bark. As for a long, if price were suddenly to break out of the trading range and make a new high, then one would wait for the first retracement and go long. But not until then. Having any bias one way or the other was and is not productive.
I was going through my journal today, copying and pasting important posts into one location. Found something that I believe will be helpful to those practicing this approach. It took me some time to realize that simply taking trades based on retracements, HL's, DS line breaks, etc was not going to cut it. The trump is the context, and all markers of supply/demand imbalance have to be viewed and acted upon against this context - i.e. trend and S/R. Here it is:
Another one: Quote from dbphoenix: Each trading session is a story. The professionals have not only read the prologue, they've memorized it, though they won't all look forward to the coming session in the same way. The amateurs won't even know what play they're in. When the bell rings, buyers will have one thing in mind, sellers will have another. If you view the activity as an ongoing and continuous drama, you may be able to better understand what the other players are trying to do and avoid getting too caught up in minute details.
Here is a visual to go with what DbPhoenix said above. Reading his post reminds me of this passage from one of Wyckoff's writings that DbPhoenix has posted elsewhere: "The market always tells you what to do. It tells you: Get in. Get out. Move your stop. Close out. Stay neutral. Wait for a better chance. All these things the market is continually impressing upon you, and you must get into the frame of mind where you are in reality taking your orders from the action of the market itself â from the tape." I guess you either see what is happening or you don't. If you do, you trade it.
What gives additional importance to entering at 0900 is that by the open one might notice the hinge and may not want to enter inside it. But if he doesn't, he may miss the move entirely. By entering at 0900, however, he can become an interested observer and avoid getting caught up in the NY opening drama.
The market has already given an excellent hint. I wouldn't be surprised if we gap down Monday. (im actually betting on it)
Difficult to say. It's at the midpoint of its trend channel, so it could drop to 150 or rise to 180. Be prepared for either.
You may want to plot the ES so that you can get rid of the gaps. The SPY may gap, but the futures don't. If you want to know what's going to happen before the Monday open, chart the ES.
Always got my stop in . Close above Friday's high, and im out. Close below 165 and im going to add. Momentum will pick up heavily imo. We're also retesting an important Monthly level and I just don't see us holding on given the circumstances.