Ugly chop action last night with high% longs at prior late day support (high 80's).  Expect continued range type trades. Look for fake outs to punish emotional retail traders!

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Tricky stuff today with the only high hand really being that tail above 7.5 in the 10 o'clock hour. Didn't have an offer working so I couldn't get short. Really all day I was fighting the tape trying to find wholesale short entries. Unfortunately the volatility was virtually non existent and any high % entry was extremely difficult. Daily cup still seems to be in play, as traders trapped below the early 92.5 resistance were grinded out today. With the upcoming FOMC announcement tomorrow, clearly the participation was very low. Just want to note that today the 3lb was extremely laggard. This supports my early bias that anyone trying to run the market will get stuck.

Last night Asian traders took the US futures market up roughly 1%. The big news was Larry Summers' withdrawing of his bid for the next Fed Chairman. This secures the more dovish Janet Yellen the job. Apparently the market liked the certainty of knowing whom the next chairman will be. Larry Summers would have likely been more aggressive in his tightening of fed policy.

This all makes for great cocktail party talk, however all I care about is what the price is most likely to do next.  Shorts stuck in that daily bull cup drove the prices to new highs and now we have an overbought market with ample air on all charts. Need to respect stuck shorts who need to cover on any moves down, but see the best hands as wholesale shorts. look for divergences and exhaustion pushes.

The market exhibited MATD type action in response to last night's rally. Basically, wholesale entries presented themselves when whipped up traders tried to position themselves as if today would be a trend day. Best entries were taking advantage of emotional overshoots at levels of support/resistance. The opening short sequence, air fill on break of 97.5 support level paid very nicely (aided by an extreme tick with price declining). I took a little at the open, but failed to re-enter when 97.5 broke and totally missed out on the necessary opportunity. I should have used that to fire myself up and trade more intensely today. The low 90's support zone paid wholesale longs very nicely too, with fast rejections off those prices. Also take note of the failed retaking of the 97.5 support level, leaving late to the party longs out to dry. Should have been more on my game to sniff that out and sell hard into the move down. Overall my market read was not bad today. My complaint would be in my matched aggression on a day of decent rhythm and good opportunity. Price closed at the lows off a weak choppy 5-min. downtrend. Tomorrow look out for trustworthy support zones to get long off of. As prices is in back & fill mode, supports with the daily bull cup at their back should be pretty high probability. Stay especially on the lookout for guys getting trapped short trying to sell this hard.

Overnight rhythms still choppy and range bound. Supports held. Just tried probing long on that news focused pullback to the moving average, but scratched on 3lb turn south. Until proven otherwise 75-80 is the interim range. I do not really have a good feel, from looking at these charts right now. I didn't sit down until about 7:30 so I haven't gotten a feel for the pace yet. SOH and SOOT until the music starts to play a little louder.

Pace and setups have been awful. All day I've been playing defense. The only real mistake of the day was getting mixed up with that opening action up around 80. Remember stay high % and all will be well. Don't buck your plans and best judgment by chasing into moves that may or may not actually occur.

The key to success is trading is identifying high value situations and pressing your edge. One gets into trouble when they enter the day without a plan, or even worse have a plan but allow their emotions to take over and the plan goes out the window! Always know where and what your edges are when entering the markets and have a plan of action to execute those edges CONSISTENTLY. Even if you are wrong, and believe me you WILL BE WRONG (we are only human) - as long as you are following your best judgment with consistency you will be okay. Generally when our emotions take over, most dangerously fear, our perception becomes distorted and what was once well planned, prudent action is replaced by erratic and thoughtless behavior.

This principle is so important, not just in trading but in nearly all aspects of life. Don't get me wrong, emotion is extremely important, but it must not be allowed to interfere with intuition and high percentage successful planning. We must know when to say no to our emotional desires. Emotions are to be in harmony with our intellect, not at odds.

Price in back and fill mode in this low vol. bullish environment. Again support zones provided high probability entries with high probability exits into interim resistance. Time did its thing in filling the higher time frame air. Only substantial air remains on the daily chart. Continue to trust support zones until broken.

DAX consolidated during its session, it gave a long entry at support at 8450. I of course was not up, but even if I was, I can't trade DAX and the ES entry was nowhere near as attractive. ES is still in that 80-82 range it was stuck in during the afternoon. Could be setting up for a range break. Price in consolidation, HTF long chart patterns at the market's back and air on the higher time frames all make things somewhat uncertain. Need to wait and let the rhythm develop.

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Today was a successful day in reinforcing the idea of waiting for those high % hands. I realized I lose sight of what is the highest probability market action from here to look how much the market will move IF it takes this action, with no regard of the probability of that outcome occurring. Call it greed, call it seeing $$$, but it causes me to trade lose and reckless. The fact of the matter is, you can tell where the pocket aces are on the board (unless some unexpected market action occurs and changes the current rhythm), so wait for those high end hands to show up and stop burning blinds on the trash!
Otherwise you ARE trash.

 

Support zones in the mid to high 70's was the high % hand. Looking for a break either way in the 80-82 early morning and mid morning range was the TRASH.

The DAX gapped open and ran carrying the ES with is. Yesterday ES trended but DAX traded more in a consolidation rhythm. So the expected MATD oscillations didn't really show last night. As we open we will be stretched to the north on the HTF's. Play today like MATD but be careful.
MUST dial in on that mental intensity and stay patient until I have caught onto the scent of today's rhythm.

Final hour of trading, looking for a break north, pickup in volume. Price above resistance zones. Cup patterns, stuck shorts.. Still air on 60 however... TMAR exits.

 

 

Today was a big chopfest. Another example of the lesson is you have to be ready when the opportunity is there. It was a tough day with the air on the HTF's, but the overall rhythm is bullish. Respecting supports and being aware of air going forward. The bear trap in the 11:00 hour at that 77.5 interim support (in hindsight of course) was the nice play today. Need to be there and be aggressive on sequences like that to offset the scratches throughout the day.

So shorts are stuck, ticked off longs want in, and the price is stretched. Going forward, look out for wholesale longs entries. Mid to high 70's support zones. Remember, always stay focused!