Choose the intra-day timeframe(s) of choice. On the smallest of those (but not less than 3 minute bars) if the Last of this bar is less than 972 and the bar's Last (use Close if you like to wait for bars to complete) is less than the Open of this bar (making it a red bar), sell short market. Stop out if wrong, and sell 972 again on break. You may have a lot of little 1 handle losers on stop loses, but when it goes your way, hold to 912. You may lose 10 handles in a row, and then get your entry and make 60. You only do this at resistance, which 972 is. You don't sell for example 975 anticipating a break down on a bar. That would be trading no mans land, unless you want to make a bet that we are far from "FV", but that is not enough to warrant an entry, imo. You could sell any red bar above 972, but imo again that is risky. By selling 972, with "FV" way out of whack, and momentum on your side, you have a confluence of odds (conditional probability) on your side. If you were really good, you would only sell short on times of day when studies show that SIFs reverse. "And, Mr. Data, it is possible to do everthing right, and still lose." - Jean Luke Picard
Memo from goldland: strange and sudden intraday reversal in the dollar, hit gold hard. I shorted, nervously, at one. Looking OK so far. Oil is still holding, though looking like it might want to twirl around. Nat gas got clocked though. Interesting day.
Believe it or not, I learned this in the ET chatroom many years ago. I would make fun of resinate (an ET member) about all these lines on his screen. I had read Murphy and Trader Vic, and I thought it was mostly hooey. But I watched and they consistently worked. I reread those works with new respect. All he did was when the SPX went to a level and backed off or bounced, he would draw a horizontal line there. His software allowed him to extend that line indefinitely into the future, so his screen became a bunch of lines extending from the past. Color coded for S/R. A jumble of color and lines, but there is method to the madness, and it made for quick visual inspection. Then, amended with simple DOW theory and stuff from Trader Vic on the correct way to draw vertical trendlines, gives you the rest. It is really simple, and works well when combined with confluence of signals and/or time frames. I have amended what he does and personalized it...
Imo worth reading and filing away in the corners of your mind: http://www.federalreserve.gov/newsevents/testimony/bernanke20090721a.htm
Nothing to trade on, but I am giong to give ES a 60% chance of going red between now and 3 CST. NQ will stay green.