A pure Technical Play = $1020
Remember yesterday, I said that the downward trend is still in tact, Hence it makes more sense to go short rather than long. It is alright to trade pullbacks to the moving averages by going long. However, there is greater risk in doing so because the general trend is downwards and price might spike down without any reason. A smarter way to trade in this market condition is to wait for price to hit the moving averages and rebound to the downside. We will enter on the rebounce.
My chance came at 10:45 am when price hit the moving averages and immediately rebounded downwards. I did not enter immediately, I waited for further price confirmation as this can be very well be a whipsaw. With a further price spike downwards, I shorted 1 contract at 1585, and another 2 contracts at 1582, I carefully placed my profit targets at 1566 which is slightly above the low established yesterday. Now it is a waiting game, as a trader, you have to have the patience to wait and let your trades work itself out. At 1:00 pm, my trade hit the target with $1020 in my pockets.
To recap the reasons for shorting :
1 Trend is still downwards as the moving averages are sloping downwards
2 Stochastic cut down from the overbought region ( circle in figure )
3 Price rebounded downwards after touching the moving averages.