Trade Aptitude

Results of Tuesday’s Best S&P Futures Turning Points: Shorting 4482.75 filled in the Globex last night and stopped out. 

Today’s Best S&P Futures Turning Points (consider wider stops and less size in fast moving markets): 

Buy 4456.75 stop 4452.50. Short 4504.50 stop 4509.25.

The World Sentiment Index: (+100/-100) rises from +29 to +36 in a world of mostly Bullish sentiment and rising volatility.  

Catalysts: CPI @ 8:30. Scattered Fed speakers. Crude Oil Inventories @ 10:30. 10-year bond auction @ 13:01. Fed’s Beige Book @ 14:00.  

Quick Tip: Reversals Approach

The character of price moving up is different than price moving down. You’re likely familiar with the “stairs up, elevator down” analogy. Because fear is more powerful than greed price does tend to fall faster than it rises. 

This observation can assist you when it’s time to place a reversal trade. 

With the CPI coming out today and the expectation that inflation is easing we could see a strong Bullish reaction if it does ease. 

If price is melting up, “taking the stairs,” your short reversal is less likely to work. Pass. 

If price is spiking up quickly with an extended range candle/bar, your short reversal is more likely to work. Consider giving it more room to stop out but have faith. 

Contrarily, if price is melting down slowly, your long reversal is more likely to work. 

If price is falling quickly with an extended range candle/bar, your long reversal is less likely to work. Pass. 

In your daily review, mark your charts when these patterns occur. You’ll soon gain confidence in the evidence. 

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Trade Fearlessly,

Mike Siewruk