Yesterday's low was tested again, but this time from the opposite direction of yesterday's example. Whenever the ES market using the 380 tick chart test a pivot high/low or daily high/low, the market many times will correct to the 38 EMA before continuing the direction of the short term trend. After the market corrects to this point, the new high or low can then become the stop loss of any trade entry.
Here is another example that occurred on 5/08/08.
And another for 5/07/08.
I really was not sure that the gap was going to close, since the indicators were indicating weakness, but the bullish gap closers won the battle.
I found it interesting this morning that JPM stayed above yesterday's low despite this morning's overall market weakness, and is showing signs of accumulation.
Charles
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