Well the gap and go scenario did play out as predicted yesterday. Cumulative ticks trended for almost the entire day except for the last 45 mins when the futures sold off (and on heavier volume might I add) and ultimately finished at +60,000. Internals were very strong the entire day. I would say that we've had a fair bit of short covering yesterday and although some traders established new longs, a lot of them also covered their longs by days end as evident of the futures selling off in the last hour. Most traders are now waiting to see if we can get some more follow through. I would be on the look out for perhaps a retest of Monday's lows if the bears reload again. We do seem to have lost the trendline support of the ES on the 15 min chart timeframe. Gap guides are looking good so long as the futures open anywhere above yesterday's open. Overall, I think we will get some type of a consolidation day so look to fade the extremes of the first hour opening range. I would think that going short may still offer the best risk to reward as it's still a very jittery market out there.
On the trade front, I did manage to sell some RUT put spreads on the open at the 775/765 strike for June expiration and I bought some VXX puts on Monday which are working out well.
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