Last Updated:

ES 06-18 / 26. April 2018

wtl
wtl Daily Digest

Traded volume was 1.253.088 according CME settlement data. 

Strong earnings in the US helped prices recover ahead of the weekend. Facebook shares climbed nearly 10% having beaten expectations and a positive outlook. Further strong numbers from AMD and Chipotle helped confidence and even lifted Amazon over 4% with its earnings release after todays close. Tomorrow we can look forward to US GDP and the 2.5% expectation. Down from the previous 2.9% this could set the trend for the foreseeable future and especially if we get a strong number. 

There were a lot of trading opportunities during todays trading session. 

Let's recap a few most impressive one. 

Why?

This was the core of the article based on many questions I am hearing nearly every day. A good example I have seen on Twitter was the argument that a certain price level hold because several Fibonacci levels were dispalyed at a certain price. This could happen because many traders are watching and acting at these levels, so that many times these levels become a "self-fullfilling prophecy". It is great when they work. 

Shortly after that event we had following auction:

It is possible that there were some lines or levels from previous events or analysis or whatever, I don't know, but at this moment there was nothing else but "thin air" above 2663,25. 

How to trade?

It was obvious that the trend was exhausted by the volume traded. You can observe the delta volume, if you're watching it, or volume traded. 

In this case you can answer the "Why" question very clearly, because liquidity above this level was thick enough, that at least a pause was needed to find more buyers to buy all 1660 offers at 2665,00. 

There are several possibilities to trade such events:

  1. Watch the context: It was a trend day
  2. If not invested: Short this area, Stops are defined by the liq. above
  3. If you want to go long based on pt. 1: Long at the end of the retracement
  4. If already Long: tighten your stop

Liquidity Vacuum

As many times mentioned price must retrace to "fill" the vacuum above or below. See also Liquidity1 - Liquidity3

Some examples below: 

If you are lucky and long or short be immediately alerted because this move must correct and why should you as a scalper give this points back to the market. It's the same as throwing a big fish back into the water while fishing!

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