YESTERDAY RECAP:
So we have talked for a while now that the big gap up a few weeks ago leaves the bulls FIRMLY in control. And that they would remain in control and pull backs would be bought UNTIL we lost a pretty significant support. Today was the first “warning shot” for bulls and the first day in as long as I can remember that we would say the bears actually won for a change. But what does it mean moving forward? First, let’s talk about Monday. We got the biggest range we have seen in a bit on Monday (225 ticks, of which almost 175 came during RTH) and it was the first real “trend” down day we have had in almost a month. We opened the session trading below a lost support (becomes R) from the ON. Normally I am not a fan of jumping into a trade right away on Monday’s as the open can be whippy and the market is trying to digest everything that happened over the weekend. But since we took out Friday’s low ON and lost this S zone after a lot of tests I did dip my toe in a small little short (only trade). The selling was pretty relentless all day and we finished down almost 2% on the session. And by bulls losing (and closing) under 81 they lost support for the first time in a while. I will post a chart later in the newsletter showing what I think could happen from here.
Monday’s Session
TRADE RECAP:
Since we took out Friday’s low ON I knew that shorts had a chance today. And we tested the above lost S zone (becomes R) multiple times before losing it. So when we opened beneath it I wanted to see if we would finally get some selling today and we did. I entered on the retest of it (arrow) and took profit on the dips into the S zone beneath us (check marks). Unfortunately we bounced pretty good (BTD still) and my runners were taken out by my trailing stop that in retrospect was too tight but I really did think buyers were still in control and wasn’t sold that we would go lower like we did. Ultimately it was a solid trade and I was very happy with the results.
Keep reading with a 7-day free trial
Subscribe to Gallatin Research Petro Pulse to keep reading this post and get 7 days of free access to the full post archives.