Today was such a day.
Yesterday's post I forgot to mention that one of the best possible trade scenarios post trend days is the low confidence push lower to fresh lows on decreased momentum versus the prior trend day. This trade can play well both downside and upside.
And if the fresh lows are at a pure mechanical zone, like S1 as they were today, then it's game on for a short squeeze push up back into the previous day's range. (And I have been getting my R's and S's inverted lately, I think. S is the lower levels for support and R is the higher levels for resistance. But it really does not matter what you call the floor trader levels, they are excellent clues to tune into who's in control of the market) The crew was all over this trade like investors in San Jose buying million dollar starter homes. Pounce! A trade we will highlight this evening on the 5 minute.
The 2nd trade of the day was the reversal at yesterday's midpoint (or pivot). A hour and a half of lolly-gagging around at this zone with momentum diverging, the short became obvious and paid nicely. Small caps majorly diverged too.
All-in-all the day was balanced like we expected it to be. Imagine that you programs!
Going forward into tomorrow, we note that no upside levels attained put any fear into sellers. And it's natural to think today's balance as a gateway for lower prices. But this market is due for a push higher at some point, but we are not prepared to make that call here and just considering it. All that we can do now is look at both sides of the coin and flow with structure as it develops tomorrow and ride whatever wave appears!
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