Wowza! Can you say volatility? Swings like these don't come very often, and good thing. It's nice when you pick a direction and an entry and get it right, but if you're wrong, yikes! I was chewing my fingernails waiting for a good entry short and we got it early (red arrow), right into our initial resistance level. That move alone was good for 12 ES points or so per contract and it went quick. The price action was so "fidgety" that I was very anxious real time. During the reversal move up there was also a couple of aggressive long entries off dynamic support at the green arrows (page 39 of EminiEdge Trading Manual and e-book). We don't see this aggressive trend entry setups very often so here is a great current example of what it looks like, probably an another easy 20+ ES points worth per contract! After this nice move, a retrace right into our second support zone, the action reversed and screamed on up nearly 40 points, incredible. It was safe to say at that point, at least on a shorter time frame, that the up swing impulse had begun, and a nice re-entry presented long (blue arrow) if you were patient enough to wait for it and there was an alternative EE there for confirmation. These days you do have to have nerves of steel and deep pockets or you can get wiped out in a hurry with terrible slippage. Be careful as this volatility is likely to stick around a while based on the bigger term picture... All that being said, +40 points available in a few clean setups and all done in 2-1/2 hours, seems like EminiEdge trading can't get much better. There were varied entries in the afternoon but I couldn't last that long, with the volatility my nerves were shot by then. :)
Remember we are still in a nice breakaway downtrend as mentioned in our last post about the "Emini being on a knife edge" and this volatility is part of that bigger picture so beware. I'm still working on how to take pieces out of both directions consistently by combining price action with time cycles to try and get timing right and expand profits even further... work in progress for me. Keep an eye on the volume as well as this is keeping us from a full on collapse at the moment, hence the stop and reverse move for today. We will likely get another spike in the down direction soon (zebra stampede anyone?). Be nimble and open to trades in both directions as there will be more opportunities if you can get the price action read right by using the techniques taught in the EminiEdge Trading Manual, or the alternative is to get run over!
Lastly a housekeeping note, a big thanks to those who took the time to respond to the survey. I really do appreciate it. If you missed it and still want your voice heard there's still time as I haven't taken the time to tally the results yet. You can find the EminiEdge Trading Survey here...
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"Trader Joe" trades the Emini S&P exclusively and is the main influence behind EminEdge.com.
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