Quick blog update on a Monday morning. Two trades for me on the DOW, both on the long side. Nothing more than scalps at the moment, the market is very choppy and conviction less so until someone tips there hand I’m in scalp mode.
Good support showing up at 10766, so watch out for that. I’ve got a bid sitting in just under at 63, which I’ll leave and add to if we see some TICK divergence. Targets for that will be 10781, 10794 and 10801. Stop 13ticks.
What has been the more interesting market today was OIL. I trade the DOW 90% of the time but I like to keep my eye on a few markets in case I see any really good setups. Did we ever get an absolutely fantastic setup today in oil. I call it the magnet trade.
When you get a significant move accompanied with good volume, if the first pullback occurs before a key level then I like to trade in the direction of that move with a target of the key level. Why do I like this trade so much? Well the hard work is done for you. The target is clear, your stop can be tight as you are waiting for the tape to push again in your direction before entering which allows you do ditch the trade if you don’t get that immediate follow through.
In this case the market had pressed lower on good volume after a gap up. The pullback was just shy of the key $76 level, 20 ticks away, enough for a nice scalp.
If I was feeling extra aggressive I’d wait for some sort of double bottom underneath the $76 key level and look for a push back up to the $76.20 (pause point)