Nasdaq 100 gaps up on Nonfarm payroll data
From Briefing.com:
July nonfarm payrolls rose 113,000. This was a bit less than the expected 125,000 to 150,000 increase. The initial reaction in the stock futures to the release was bullish. That is a valid response. The payroll numbers reflect moderate economic growth. The data decrease the likelihood of a Fed rate hike
5 minutes Emini Nasdaq 100 candlestick Chart
Nonfarm payroll was released at 8:30, 1 hour before the opening bell and it is not unusual for the Emini Nasdaq 100 to react immediately to the news release. Price gappped up on the opening bell and even went up for around 15 minutes before showing sign of weakness. In my experience, such gaps due to the release of nonfarm payrolls are usually closed. Now, this is not a definite rule, but if you look at past records you will know that there is a high probability that the gap will be closed.
Price action from 9:50 onwards was confusing at best, there were several attempts to close the gap but price rebounded immediately. I got whipsawed out of my position and loss $57.5 ( not shown in figure). I decided to wait patiently for a more accurate sign of gap closure. My chance came at 11:50 when price broke out of the triangle. I shorted 1 contract immediately at 1525 and when it crossed over my moving averages, I shorted another 2 contracts at 1517.5. Momentum was good and I was confident that price will continue the plunge. My profit target was at 1510 which is the support established yesterday. At 12:30, my profit target was hit and I am out with $600 profits. Patience counts!