MES Daily Review
5/8/19
Yesterday was a weak bull trend day that evolved into a trading range.
The market opened always in long from the previous day's strong rally from a wedge reversal (nested and larger). The bears attempted to form a bear trend from the open, but failed on the third bar and were unable to fill the bull breakout gap. There were a few reasonable buy setups shortly after the open, with the appropriate stop below the micro double bottom (blue bar), or the prior days low (either were acceptable). However prices formed a nested wedge reversal, where it was a good idea to exit even with a loss.
The bears filled the bull breakout gap, but failed to break below the opening low. It was a bit risky to take the first buy setup since it was a doji bar and there was strong selling (reasonable to expect a second leg down from the wedge). The second leg down failed, and resulted in an outside bull bar / high 2 bull flag. The stop was below the low of the day. It was reasonable to take profits after the tails formed and larger paroblic wedge reversal with a good bear bar (red arrow).
Once again the bull gaps were filled, but the bears could not break the swing low, and prices set up two good high 2's. Again the best stop was below the low of the day. When prices formed a double top with the larger wedge, it was reasonable to take profits. The market went mostly sideways in a tight trading range after this point, until the second leg down from the wedge reversal into the close.
Yesterday was a weak bull trend day that evolved into a trading range.
The market opened always in long from the previous day's strong rally from a wedge reversal (nested and larger). The bears attempted to form a bear trend from the open, but failed on the third bar and were unable to fill the bull breakout gap. There were a few reasonable buy setups shortly after the open, with the appropriate stop below the micro double bottom (blue bar), or the prior days low (either were acceptable). However prices formed a nested wedge reversal, where it was a good idea to exit even with a loss.
The bears filled the bull breakout gap, but failed to break below the opening low. It was a bit risky to take the first buy setup since it was a doji bar and there was strong selling (reasonable to expect a second leg down from the wedge). The second leg down failed, and resulted in an outside bull bar / high 2 bull flag. The stop was below the low of the day. It was reasonable to take profits after the tails formed and larger paroblic wedge reversal with a good bear bar (red arrow).
Once again the bull gaps were filled, but the bears could not break the swing low, and prices set up two good high 2's. Again the best stop was below the low of the day. When prices formed a double top with the larger wedge, it was reasonable to take profits. The market went mostly sideways in a tight trading range after this point, until the second leg down from the wedge reversal into the close.
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