Today’s pre-market trading made a quick drop with the early reports, but gained it all back during the first three-minute bar. Up another five points, and we had completed the range for the day. About the only thing the market accomplished was to reach the 78% retracement level of the last decline. That’s a real disappointment after yesterday’s rally.

Rangebound
As I’ve mentioned before, if I can’t see a reasonable trade in the first hour and price is moving sideways, I mark off the high and the low of the early range. Then I look for either a breakout followed by a setup, or a “perfect” trade that acts as though it will escape from the range.

It’s amazing how often this simple act will keep me from trading when the market becomes rangebound.

There were several 78% pullbacks inside today’s congestion. This often happens when the market doesn’t have any sense of direction. And until it figures out where it’s going, my job is just to watch.

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