Tuesday, August 16, 2011

Tuesday 08/16: Lots of volatility due to the Sarkozy-Merkel meeting

As stated in my previous post, I expected Monday's high to act as resistance and it did. Unfortunately, it was at that same time the Sarkozy-Merkel meeting took place. Their statements brought lots of volatility into the market. This ruined my setup since I wanted to wait for a down-bar (confirmation) with a low risk entry point. A 5 minute-bar with a spread of 10 points on the ES-futures isn't exactly low-risk, so I skipped the entry. Too bad, since we went straight down to support near the 1180-level, a swift 20 point fall.

We bounced on 1180 on rather good volume. The bounce ended in the last half hour near 1195-1196. Bears stepped back in to drive prices lower towards the close.
The indices are printing mostly doji's on the daily charts, indicating indicision. These candles are most often seen at tops and bottoms.

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