Friday, April 8, 2011

To fade or not to fade today's likely up gap??

The stats for fading today's up gap is not great in my opinion and given a large part of yesterdays sell off was caused by the news of another earthquake in Japan. My best guess about the ensuing day structure on the futures is that buyers will immediately come in on the open and bid the market higher and possibly test the recent highs. Whether we see any buyers show up at this level is yet to be seen as we have sold off from the highs for the last 3 or 4 days. A good trade is probably to wait and fade yesterday's highs on the ES at 1335 with a tight stop. Internals weren't really bearish for yesterday given the 30 mins of panic.
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2 comments:

  1. MLApril 11, 2011 at 1:45 PM

    if you did fade it, was it on the es or tf?

    ML

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  2. Michael ChinMay 2, 2011 at 3:47 PM

    Hi ML,

    Looking back at the records I actually went long on the TF 30 mins after the open but got out soon after that for a very small win. Can't remember the reasons why but probably because I did not think the early strength would hold.

    ReplyDelete

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