E-Mini Wrap Up – 11/03/16

Today’s session was a lot more tricky to navigate than the past two. We opened with a relatively bullish signal which however quickly dissipated and after some hemming and hawing near VWAP gravity quickly set back in. Great session to learn how to assess sentiment and participation after a series of selling sessions. It’s easy to get mentally locked into ‘business as usual’ after months of sideways churn where mean reversion is the name of the game. The dynamics shift significantly during a sell off and thus it is important to look for clear signs of a low (e.g. a spike low accompanied by a positive signal that remains for two candles or more) before jumping into long positions.

Medium Term

That said – we are starting to paint a small divergence on the hourly panel (on the left) which we ought to keep an eye on. If that one continues tomorrow then we may be closing the week with a run up higher. But for now let’s just trade the tape ahead of us and not fall prey to bottom guessing.

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