Daily Reflection: 4.01

1 Apr

We are starting a new section which we call “Daily Reflection.” This section is devoted to sharing insight from the day’s trading session, primarily relating to day trading the E-mini’s and Currencies.

We started the day with a gap up off the open. This tends to be a common occururance on the first day of a new quarter as well as the first day of the month. Typically these “professional gaps” as they are called, happen more towards the beginning of a trend rather than after a prolonged move up (as seen on a daily chart). We now have an unfilled gap below us (using the 4:00 PM EST close) at 1165.00.

After trending higher off the open with breadth ratios in the neighborhood of 9 : 1 positive (which is extremely high) we slid lower after the lunch session, bouncing slightly at the half gap and coming into the daily pivot where we reversed into the close.

One trick I like to use when dealing with pivots is calculate the next day’s pivot around an hour or so before the close. This is a general # and will move with the current closing price, but in the last hour the market tends to drift towards the following day’s pivot.

The pivot can be calculated simply by using the day’s (H + L + C) / 3.

The stock market will be closed tomorrow and futures trade a half day, this will likely be a thin market and with the Employment Situation number released at 8:30 EST, one you will probably stay away from. Enjoy the 3-day weekend and the beautiful weather we’re having (at least in Chicago).

Have a great weekend!

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