Well I must say that the StP trading room rode the perfect wave yesterday which was pleasing for 2 reasons. Number one of course was a positive 50 pips but for me the MORE pleasing aspect of the trade we took was the pure technical & clinical setup the market gave us. Entry became automatic by following the 7 Holy steps and the acceleration we strive to find was there, swift & clinical. If the market continues to give us technical setups like these, StP will have a wonderful 2012.
First glance at the charts this morning gives you that déjà vu feeling – potential flag after 100 pip crash. I see a major difference however. Price has found a double bottom at a strong level of support (our Daily Critical Zone). What does this mean for us? Well it DOESN’T mean we enter long at market price with stops below the double bottom – that’s for others.
What it’s telling us is that there’s a potential reversal coming with the emphasis on POTENTIAL. Before considering placing a long order, we need confirmation on the reversal. At the very least, we need to see a higher high and a re-test of a support or resistance trendline from above. Trendlines today however, are very hard to find & we mustn’t forget of course that we remain in no-man’s land in the middle of a super bearish channel with only one level of support between the Euro & a bottomless pit. Price action is magnetised to the Daily Pivot today in consolidation after yesterdays fall.
So, what to do? Without AAA StP trendlines we must sit on our hands and wait for PA to form new highs/lows so we have reliable lines to ply our trade. I do see an intra day resistance trendline that might prove interesting so we’ll look for a setup there. Be mindful however that sentiment is mixed & any entry will be small stake.
Happy surfing guys
Certified SurfinThePips.com Trader