Here are the summary for the day.
FKLI
We traded to the following levels today:
FKLI April Contract
Opened 1601.50 from 1603 the previous day
High 1604
Low 1591
Close 1591.50
What a day.. We had a big pullback from the the top of the recent rally and it just stop right at the trend line.
We expected it to be choppy and slightly bearish.. and price went down to test all levels of our support.
These are our levels for this morning.
Upper Resistance: 1606.50 and 1611
Lower Support: 1600, 1596, 1593 and 1590
Prices never went far enough to test the resistance in the morning and stop short at 1604.
The first trade in the morning would have been to place a sell stop below the morning range. The low of the open was 1601.50. As we expected a slightly down day, it was reasonable to place a sell stop just below the low. Prices then quickly broke to 1596.50.
Once it touched 1596.50, it bounced back up and traded in a small range of 1597-1598.50 for a period of time. Ok when we have such a big down days as represented in the chart as big red bars, a few things could have happened. 1, we would have continued the down move after a brief pause. 2, the support hold and as go back up, as was the case with yesterday's trade. 3, we continue to consolidate for a longer period of time.
In this case, putting a buy stop above and a sell stop just below the 1598.5-1597.0 would have been the right trade. First, if prices would consolidate, you would not get filled. Second, if price does rebound, it would have taken in your long entry at maybe 1590 to 1590.50. And thirdly, if it has broken down, it would have taken your short entry at maybe 1596.50 or 1596.0. Unfortunately in this case today, I took decision of a higher risk entry and enter WITHIN the 97-98.50 range at 98.
Now here are the mistakes I did today:
1) Entering within the 97-98.50 range is already a risky affair. If I'm going to enter early within the range without waiting for a confirmation, I might as well get a better price, say, at 97 or 97.5 right? Then my stop loss would have been just below the recent low of 96.50. Bigger profit, smaller stop loss.
2) Sometimes, taking a higher risk entry does pay off. But evidently it wasn't today. After such a big down move at a big bar, it was totally foolish to try and buy without waiting for a confirmation. More so since we have been expecting price to pullback today. Ugh.. Feel like kicking myself..
3) And since I committed to a long position, I wasn't able to take the short trade when price finally broke out at the low of the range! Talk about double whammy! :(
Then we finished the first session for lunch.
Lunch opened at the 96-97 area. And soon after, broke down to a low of 92.50. A Sell stop at 95 would have been good to capture a big portion of the move down.
After lunch opened, anything could have happened. Price seemed to hold at the support area of 96-97. Now, if I had placed a buy stop at 98.50 and a sell stop below the low say at 95, my work has been cut short for me. First, if price really did rebounded, it would have got my long on the way up and I was on the way to a good scalp. or if price decides to break down, it would have caught my short at 95 on the way down for a nice scalp too.
But I did not take any of the trades immediately after lunch opened.
Then price tried to rally but met with stiff resistance at the 93.5-94 area before succumbing to the selling pressure and touch a low of 91 before closing at 91.50.
So today was an eventful day and a good reminder the old adage, 'do not catch a falling knife' in trading! A short scalper would have had a field day just scalping, and when price bounced up, sell again..
So, what is for tomorrow? We will have to see how the US market close tonight.. the S&P500 seems to be pulling back to and is near the support at 1391. I will confirm again tomorrow.
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FCPO
Ok here is the FCPO Chart.
We traded to the following prices today:
Open 3542 from previous close of 3532
High 3574
Low 3538
Close 3557
So we closed today as a small bar. This would be interesting to see.
Our levels we as follows:
Upper resistance: 3566
Lower Resistance: 3510, 3496, 3477, 3450
In the morning, prices gaped open and quickly trade to a high of 3577 which as just beyond our resistance area.
Then we proceeded to trade slowly down throughout most of the day.. and touching a low of 3538 and bouncing up to close at 3557.
There was no substantial sell down and price seems to hold nicely at our previous resistance area of 3550 in our previous updates nor did price trade up high beyond our resistance today.
But it seems that the sellers are not able to exert much control yet. But I don't think the buyers will be able to take this up too far away from current levels too as the other CME grains namely Soybean Oil, Soybean, Wheat and Corn futures have yet to break their own resistance. Granted all of them are trading near the resistance level except for Wheat, but until a conclusive break of the upper resistance of the respective contracts, I will remain sideways to downward biased.
We will see how are the cash close tomorrow morning and post our daily levels after that.
Wishing everyone a great evening and see you all tomorrow!
Best Wishes,
Tech Trader
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