Volatility Free Fallin' as Bulls Try to Conquer Pivot
Edge Levels (ESM4): 4938, 4963, 4995, 5006-09, 5019, 5027, 5038, 5057, 5077-88, 5100
You can access the MGI document HERE for the latest Edge Levels and insights.
It’s National Talk Like Shakespeare Day, so please tell a trading friend about this newsletter if you recognize fortunes are writ in Mr. Market’s fickle hands, where traders chase the morrow's fleeting sands.
And a massive long opportunity to end the rare red streak it was!
Yesterday, I said squeeze risk was high and a big long trade opportunity was imminent. In particular, I highlighted the following:
The fortunate opportunity came as Europe closed, with Price filling the gap TO-THE-TICK, then squeezing 70 points—elevator up.
It was easily the best Gap Fade I’ve ever seen and an example of wily Mr. Market deploying reverse psychology to take the most obvious route, for once.
And guess what?
I missed the entire move.
I offered limits at 5004, 5006, 5009, and 5016. Then, I whacked the bid at 5022 before quickly scratching when I identified the FOMO motivation.
More than fifty points later, FOMO looked back at me and winked.
This is my sloppiest missed trade of 2024, and longtime readers may remember this EXACT issue haunting me to the tune of thousands of dollars back when BARB was the star of this newsletter.
The issue: if you want to be in the market, enter the market. This is one of the critical lessons in Reminiscences of a Stock Operator, my favorite trading book.
You can always reenter.
It’s better to give back five points than 50.
Five Trades for RTH 4/22/2024:
Volatility is down almost 20 percent from its high, so shorts are risky until VIX catches a bid again. Price is also trying to break out of its Descending Triangle. I’ll be watching that structure closely today.
Backtest of 5100 (short). Two stars. This is a significant resistance near today’s Four Sigma. It's nothing fancy, just a high-probability fade.
Backtest of 5077-88 (short). One star. Yesterday’s high is near the edge of today’s Expected Move in a critical supply zone. I’ll take this trade small, only adding if Price reclaims 5057. Caveat venditor1 again here, as buyers successfully defended the bear/bull pivot overnight. (Cool that we closed right at it yesterday, eh?)
Reclaim of 5030 (long). One star. This is an area of solid demand if sellers flush the Overnight Low. It’s also in the lower third of today’s Expected Move. I’ll play it like the Prior Day High Backtest trade above, only adding once Price reclaims 5038.
Breakout of 5020 (short). One star. This is also a tricky trade with the trendline cluster below, yet I’ll take it if Price shows Acceptance. I’ll add below yesterday’s low.
Reclaim of 4963 (long). Three stars. This would be the dream trade today. I’d buy with both hands, with a stop at 4958.
I hope to see you on the livestream trading floor.
No sound?
No problem.
You can hang out in the chat.
I'll be on in 10.
Stay classy until then.
Our gentlemen’s agreement:
I give you free, valuable content.
You use my affiliate link (HERE) if you join Apex. Coupon code “MASTRO” gets you the best deal available.
Apex paid out more than $25 million in March. They’re celebrating with 80 percent off AND one day to pass until April 30 at 16:59 EST!
Thank you for your attention.
Talk soon,
Mastro
PS You can follow me on Twitter HERE for breaking updates and analyses.
Remember, you can respond to any email, and I’ll reply within 24 hours. You can also click the button below:
I’d love to connect!
LEGEND’s word of the day. It means “seller beware.”