ES Journal Archive (2009 - 2010)
- Thread starter Jahajee
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It'll print 21.50 or lower today.
Rumor is JPM is pushing EUR / JPY and European equities. Must be hit by retail sales number and GS short ....
I posted an explanation in the ES Gapfill Journal, I will quote it for explaining it further, although I think, it is pretty obvious...
The 2nd gap rule "guarantees" that after a huge gap, the closing price will be visited again sometimes during the next day (if there is a same direction 2nd gap) with high probability (90%)...
Quote from Pekelo:
You don't have to be up all night, that is the beauty of it. I am not sure what timezone you are in, but the huge upgap was already present at 9 pm Eastern, so all you had to do is go short with a target limit order close to the gap. Everything else was automatic, while you were sleeping.
Another way to get ready for a possible 2nd gap is that you just put a limit order somewhere where you think the market might trade up overnight. The close was around 1091, so a short limit order around let's say 1096 would have been good expecting an at least 5 pts upgap. Now it isn't guaranteed that your limit order gets filled (there might be no upgap or it is only 4 points) but the whole point is that you don't have to sit there and wait it out, you just go to sleep and see what you have fished by the next morning.
A 3rd way is that you go immediately short at the close. If there is an upgap, you are pretty much guaranteed that eventually there will be no loss, because the market will return to this price. So you can average into the position if it goes up. But if it goes down overnight, you are already short from the close, thus profit....
The 2nd gap rule "guarantees" that after a huge gap, the closing price will be visited again sometimes during the next day (if there is a same direction 2nd gap) with high probability (90%)...
Here is my take on this... at 1066 the ES "got ahead of itself" by selling off prematurely. This was almost immediately corrected (a bit slow at the bottom because of the holiday weekend) and we bopped back up to around 1066.
I've attached a graphic of what the chart would look like without that little excursion.
EDIT: LOL - didn't realize you were talking about INTC.
PEC, quantify "Huge" gap up if you would please. I am sure it is relative, maybe using ATR? 3 points is "huge" relative to 10 point ATR, but small in 25 point ATRs.
Thanks.
LOL thats for INTC in response to your greener and greener INTC map. Sry.
EDIT: Here's what I think of this market. Initiating a short position, ammo style (adding to position), somewhere here is a good, sensible trade technically speaking. The chart below is what I'm basing it all on. I really do not think we'll blow through the down trendline that easily. If thats the wrong trade, then a stop above the trend line and away from any head fake will be the cost of that trade.
EDIT: Here's what I think of this market. Initiating a short position, ammo style (adding to position), somewhere here is a good, sensible trade technically speaking. The chart below is what I'm basing it all on. I really do not think we'll blow through the down trendline that easily. If thats the wrong trade, then a stop above the trend line and away from any head fake will be the cost of that trade.
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