Trading What I See

Yesterday’s reversal continued this morning with a gap down. The first thirty minutes gave no pullback entry, and at the end of the first hour the range was well under six points.

Whenever I have no entries that I like during the first hour, I normally wait for a break of that range before making a trade. Today that didn’t happen until lunch hour, and by that time I saw no indication of a trend. So although there were some possible small trades, I wouldn’t have taken any of them.

The morning drop turned right at the 50% retracement of the rally from May 1st, and spent the rest of the day filling the morning gap. The first pullback to the slow rally was only 38%, and I will usually not take a trade on that first retracement unless it is at least 50%. Are you getting the idea that I don’t like the present trading environment?

The A-B-C move met resistance at 162%, and bounced along a rising trendline until the close. That last little fakeout/breakout just managed to close the gap, and if this had happened early in the day I would have traded the reversal as a Spring.

If you look at a daily chart we have been going sideways for 17 trading days. Just remember, the market can keep doing nothing until it wears you out. Then it will make a sudden move. Let’s just hope it happens before the summer doldrums set in.