Today the market maker is playing me like a total amateur -- it held the bid for a while and then drop, held a new bid lower and then drop again. Once all the longs in the consolidation are stopped out, it starts to rip to the high.
What a messy chart we have from the trading yesterday.
The capitulation sell bar through the Tuesday low was clearly due to a big stop being triggered.
Someone must lost a fortune or got himself fired by that stop loss.
Market at this moment is making corrective legs to the upside. 12705, the neckline is the level of high interest. I am marking that one out on my chart as the level to watch. Before that is the 12670 the weekly VPOC. Expect a lot of choppy price action around that one.
SOrry for my infrequent update of my journal. Trading with two young kids is quite a big challenge, to say the least, if not impossible.
Back to the market. This morning DAX has tested the prior day's POC/VPOC 12760 level by a sudden down thrust when the liquidity is low. Hence the market maker has the upside in mind, because the stop run usually runs counter to the market maker's real intention.
By looking at the long term EuStoxx chart, it is easy to see that the European stocks are poised to be bullish as it is trading above last week's resistance after it breaking out of the consolidation base at the low.
Given this bias, I am going to look for the appearance of strong held bid and get in after a successful test of that held bid.
After all, I will let the tape talking to me with or without my primal hypothesis being confirmed.
Yesterday the massive up more bullish drive dissolved in the thin air after the NY open. It has traded back exactly where it has started yesterday morning.
It has confirmed the suspicion of many that the the drive was merely a result of short covering instead of new long term money. After the cash close, DAX has been trading in a tiny range of 15 points for the whole night session, which is quite unusual. This might be a accumulation range that some big money is seeing the value and accumulates inventory at the low. Note that the location of the consolidation range coincides with the developing VPOC of the this week.
Hence I am willing to take a bullish bias and trade to the long side when price is able to maintain above 760 area.
the euro si pushing up quite strongly this morning.
do you consider this as a meaningful inverse correaltion holding dax down?
if so do you look also to euro profile?
thanks.
the euro si pushing up quite strongly this morning. do you consider this as a meaningful inverse correaltion holding dax down? if so do you look also to euro profile? thanks.
Ignored
your profile picture. Is that tulips?
Correlation should not be traded exactly. The most important thing is still the tape in DAX itself.
Btw, the Euro has formed a Wolfe wave short pattern. I am considering taking a scalp short at the high.
Thanks for mentioning.
however I am realizing it is probably better to develop a much shorter term attitude, because looking at waves and swings does not always work, and this is not easy to manage with a small account.
That is why I find very interesting this thread on INTRADAY trading.
on the euro I am long, for now in the money .... , target 1,183 see attached image link https://www.tradingview.com/x/mlQfQnN8/ however I am realizing it is probably better to develop a much shorter term attitude, because looking at waves and swings does not always work, and this is not easy to manage with a small account. That is why I find very interesting this thread on INTRADAY trading. {image}
Ignored
I agree with your view, I am also bullish on Euro on a longer term framework. Just I have missed an entry this morning.
I don't want to enter here when short term weakness are seen in Euro.
Take a look at this morning's trading from algo's perspective.
The shake out this morning was driving below the 1 std dev band and keep attacking the 2 std band.
Why?
To shake the longs out by squeeze them as much as possible. After standing above the VWAP, it is poise to attack the VWAP band of the other side.
Watch the 2 std dev band from the high side for short squeeze.
Today's is most likely a non-trend day, hence it is dominated by the algos.
The long liquidation yesterday after the NY open was quite scary for some. After it took out the prior day's low, it seems that DAX is going to be sold out hard again. Many people including some of the big funds and prop traders hit the panic button and liquidated their long holdings.
However, what it did was merely to test last week's POC and, in the process, form a bull flag formation.
Today it is likely that we are going to have the week high 12925 being taken out and challenge the 12985 volume node before the italy panic dump.
