Gap Closure, Stochastic down, Confirmed by MACD -> $360 profits
5 min Emini Nasdaq 100
Market opened with a 14 point gap and for the first 5 minutes, it seemed to be going up, making it a runaway gap.. but it lost it's momentum and began the plunge down. Now, the question is, whether price will continue to close the gap or is theh upward momentum still strong, we have to extra careful here about shorting..
I shorted 1 contract at 1865 only when it was clear that stochastic have cut the overbought region, Short-term MACD also turned down sharply.... I shorted another 2 contracts at 1862 when there was a slight pullback.
After that, it was just a matter of being patient and letting the trade work out, notice how Mid-term MACD crossed it's signal line as the trade progress? This is a sign of confirmation that we are in the right direction.
However, at around 12:00, I began to see signs of reversal and at 12:10, there was a huge spike upwards, causing stochastic to cut up from the oversold region.. I exited my position at 1857 with $360 profits...