Circled in blue are areas that could possibly shock the bulls on a gap down and get early selling. Otherwise staying long
ES PRE MARKET THOUGHTSThis a sample of how I do my market preparation. The night before I form a hypothesis of how I will approach the day if the market gaps up or gaps down. Preparing the night before takes out all the emotion and once I see the morning gaps I then refer to my plan for the day.
White Lines show the Price Levels I will be paying attention to tomorrow along with the Highs and lows of the day and pivots:
- Channel as marked above
Trend and Trades I May Consider
Trend: Staying Long unless there is a nasty down gap below yesterdays lows on the ES and the low of 2 days ago on the YM and NQ.
Gap Fill or Gap and Go: Will look for Gap Fills on an up gap below the R1 pivot or above yesterdays lows using support. If the Index's gap solidly over the R1 pivot (which I would then consider support) I will consider running with the index long at the open. If the 3 index's have a bearish gap down, under yesterdays lows (or the low of 2 days ago on the YM and NQ) will look to short and go with the gap with an eye on support levels.
Long: looking for false breakdowns off support levels to get long.Will consider a BO if there is a strong gap and the R1 is support and all 3 indexes in a agreement. Will stay away from a BO on a gap down unless there is a strong hammer off support pointing to a gap fill. Otherwise staying with fading long off support....unless a bearish gap down that is running hard to the downside. Staying away from run away trains.
Short: No Fades short unless a modest up gap and R1 is resistance for all 3 indexes. A bearish gap down may consider fades the gap fill area as long as there is not strong bounce off support. If a nasty gap down surprising the Bulls then may consider Breakdowns but aware of support areas.