Dax40. Monday 19 09 2022. Pre RTH Kick Off Notes
Overview From a wider macro perspective the key to this week will be the FOMC on Wednesday. This will drive US markets into the next week / month and probably set the tone until year end dependent on what Powell says at the press conference. If Dax is to break the lower boundary at 12400 which has been in place since Nov 2020 what happens post the Fed will give us a heads up. The S&P broke its ascending TL pattern which had been holding lower levels since June this year but Dax has not yet followed suit and its TL from July remains in tact. A break lower of this TL and the important 12600 S level is the first thing to watch for any lower test towards the critical 12440 level. Coming back to today we still have the futs gap from Friday which was not closed and could remain as an initial target for intraday long side price action. Above and slightly below we have 2 cash gaps in close proximity at 12904 and 12956 and Thursdays RTH low at 12925. This whole are between 12900 and 12956 is a prime long target / short reversal area. At the lower end we have 12710 which had no H1 closes below on Friday and provided firm support all day. In addition the range split / pivot I am using around 13050 is an important range bull bear zone. A break and hold above here moves us back into the higher range, holding below suggests we continue to trade the lower with the trend line, 12600 and 12400 as the lower bounds. So from an initial structural / framework stand point we have 4 keys levels / areas. 1 the ascending lower trend line on D1 + the 12600 Support level 2 12700 S area which held Friday 3 the futs, & cash gaps at 12904 and 12056 with the futs gap in the middle and Thursday RTH low at 12925 4 the range pivot / bull bear zone at 13050. I will be using these key areas as a gauge for "if this, then that" price action and set ups as we start Monday RTH. Eyes on 3 initially as this has plenty of reasons to both attract and repel prices. Levels R1 - 12925 - 12950 R2 - 13050 - 13070 R3 - 13145 - 13175 NB: DMA50 at 13220 S1 - 12600 - 12620 S2 - 12430 - 12455 S3 - 12385 - 12405 NB: note spike low at 12690. Bullish scenarios As said on Friday any bullish momentum needs to close the Futs and cash gaps, hold above and show some RTH pa strength. We could get a long opportunity from an initial move up after the open to close the gaps area but fast failure with no attempt at holding above suggests no desire for higher prices. It would have to clear R1 to suggest it has any real upside momentum and for today we can use the whole gaps area between 12900 and 12950 as an indication of strength / weakness. It´s a wider area than we might ideally like but that's the pa we have and we have a number of levels within this area it needs to clear or reject. Watch for breaks and false breaks. An alternative long possibility is if we see a push below the 12710 zone maybe testing the spike low at 690 and fast rejection. In this case I´d be looking for a break back over the 730 zone level to get long. Classic false break pa. Bearish Scenarios Given what we see right now I´ll be looking for short opportunities in the first instance. From last weeks pa bears are in charge with a sequence of LH´s and will continue to be dominant if we are not able to close the gaps and move up to at least test R1 and or the range pivot area. Look for short set ups in the R1 zone. For any further downside the 12700 would need to break and hold below. In this case we can look for pullback trades to get on board short below 12710 and the 12690 spike low.
As mentioned the S&P broke its ascending trend line which has been the driver of higher prices and been in place as a triangle pattern for some months. Next will likely be a retest from the underside. Failure and we head lower. Weds FOMC holds the key for now. Once past Weds we will get a clearer view of where next. Summary We have clear levels, a series of lower highs behind us, a failure at a key D1 level (13450) a bearish lean and a big catalyst on Weds. The odds are tipped for lower or ranging until the FOMC. Look for tests of R1 and the gaps area and for fades / false breaks. If we fail to clear our first R zone of interest 12814 - 12838 that would be a sign of lower S tests in coming always bearing in mind the Fed Wednesday as we could range until the data before any bigger moves. (more on the possible FOMC scenarios later) RTH Post Session Review
The session played out pretty much in line with the scenarios noted above in the kick off notes. First we had an initial balance long scalp in pre mkt in the run up hour to the open (see the concepts page). There wasn't much to be had but if you took it as I did (see Twitter) there were 25 - 35 points on offer. Good enough for scalpers like me :). Next price broke down from the open went under the 12690 level noted above and gave us a pullback entry exactly from the pre mkt low formed where we took our earlier IB long scalp. Short from 690 on this pullback (a regular set up) was good for another 30 - 40 points only as it turned back up before the S1 zone. However once it tagged 12710 another key level noted we got another opportunity to short this time for 100 points down to S1. That was the end of my session for the day (The Queens funeral) but there was an equally good long opportunity straight out of S1 at 12600 which ran for 270 points before turning just before the RTH close. We also had an opportunity to jump on once the US opened strong after Dax pushed over the 12710 - 730 zone and pulled back to 730. All trades today were discussed above prior to the open and were regular set ups that once we know our levels we should take every time. It should have been a good day compadres :). More of the same tomorrow.
Dax40. Tuesday 20 09 2022. Pre RTH Kick Off Notes
Overview Tight ranging over night pa. as I write held lower by yesterdays RTH High and our 12925 level at the top. The rally continued from yesterdays bounce from good S at 600 and price tested our 12925 level exactly at the Futs open. The US staged a rally as we head into the headline FOMC tomorrow and Dax followed suit in the extended hours. Pre market came off a little back below our 12925 zone and this area looks important for today as to what pa we get. A break over 950 opens up higher zones, failure lower. It seems that at least until the data tomorrow, lower levels HTF are to be defended and that today we will likely see a clear out of the gaps areas between 12900 - 12950. We have closed the Futs gap (just about) but we have to wait for the RTH cash session to close the two cash gaps in this area at 12904 & 12956. We got it just about right yesterday with our analysis, levels, resulting price action and set ups. Dax came down to test the 12600 "gateway to lower prices" level for the third time and we got a firm rejection in the RTH. Any further move down to 600 again and it is likely to break as it weakens the more it is tested. It therefore remains an important level as we head into today and the run up to the FOMC tomorrow. First though we have the 12690 - 12710 zone which acted as a both S and R yesterday and this would need to break to open up another push to 600. Higher up the chart we have todays R1 & R2 resistance zones where we can expect any test to offer up some initial fade opportunity and to watch for break and false break pa. The cash 50DMA stays around 13220. With the FOMC Weds all this pa on Dax and the S&P could be positioning ready for the data and press conference. However it still provides day traders with some good opportunity in the run up. On a more macro level I read yesterday that Germany were close to 90% gas storage levels and that alternative supply routes other than Russia were set to increase capacity. This may take some pressure off Dax regarding gas shortage concerns. For today then watch out for perhaps more range bound pa as we get closer to the data having already tested the key HTF 600 level. Any move up will likely encounter firmer R and any extended push to the 50DMA will be defended by the bear camp in the first instance. Any break and hold above our first level of interest 12925 - 12950 provides impetus for higher zone tests. A fail here could push us back down to test the 800 area (S1) and maybe lower to yesterdays pivotal 690 - 710 zone (S2). Watch for a 12956 gap close and what happens here as this could give us a heads up on what we may get for the rest of the day. Also eyes on yesterdays pcc / our S1 just above 12800 for what type of reaction we get here. Levels R1 - 13054 - 13076 (our range split pivot - see yesterdays chart) R2 - 13150 - 13175 R3 - 13360 - 13380 NB: DMA50 at 13220 and minor zones S1 - 12810 - 12830 S2 - 12690 - 12710 S3 - 12600 - 12620 Bullish scenarios We have 2 initial bullish scenarios. The first would be to watch for any test lower maybe an inventory correction down to S1, for this to hold and provide support for a higher push. Second an open drive over the 12950/6 gap close level, holding and basing for another push would be good for the bulls and open up higher levels and zones. Bearish Scenarios Given the reaction from 600 yesterday the bears have lost a little momentum although holding below 950 area keeps them in charge for today. Breaking and holding below S1 reopens S2 and the 700 area.
The S&P defended its lower levels yesterday and staged a decent rally from 3830 which also helped to drive Dax higher. As I write it is holding just above 3900 (its gap area) and is back testing its trend line having put in a strong green doji on the daily. What happens here is key to what next. As mentioned I think everything now depends on the FOMC. Summary HTF level support was defended yesterday. Whether this is positioning prior to the Fed event or not for today we watch pa unfold, note out levels and scenarios and act accordingly like all right minded day traders should do :). RTH Post Session Review
A good start to the RTH followed by 4 or 5 hours of chop. In reality there was only 1 trade to be had today and that was short from our gaps area. You took that - it was all you needed as money was on the sell side. There were a few trades to try but nothing really had any legs. I took some from the gaps short and the 1st test at S2 for only a few points then had a loser trying to sell a breakdown under S2. So it was really a case of be short from just after the open or chance your arm later at some lesser opportunities as it transpired. Could have either been a great day or a so so one depending on whether you were in from the higher levels and held. It was an "ok / so so" day for me on Dax (should have been much better) but managed to pep things up a bit with a couple of decent scalps on the Dow. I trust you all had a better one :). Big day tomorrow! NB: the last three FOMC´s have resulted in a rally in US mkts. - will history repeat itself - we will see soon enough. Whatever happens as long as its not a damp squib that's fine by me.
Dax40. Weds 21 09 2022. Pre RTH Kick Off Notes Narrow range in the Dax pre mkt after a post RTH close dip down to below 12600 and subsequent rally back up and over 600 into the US close following the same pattern as the US markets as we head into the weeks headline event. NB: Putin is due to give a speech (I believe) - watch out for any reactions
Overview Without stating the obvious, its the FOMC this evening (in Europe) where the Fed are expected to raise rates by another 75 bps. There has been talk since the last US CPI print which came in hotter than anticipated of a 100 bps hike but the consensus seems to have settled on 75. We wont know till the event but whatever the actual number the Fed seem set to continue to do whatever in their powers to fend off spiraling inflation. 4 out of the last 5 meeting (see S&P chart below) have resulted in a rally post the event. The way I will be trading it however is the same as always - I will take whatever set ups arising prior to the event in the Dax and "down tools" at the Frankfurt close and wait for the announcement and the press conference. If anything stands out in price action, I may have a shot after the presser but most probably wait for the next day. I guess going on the last 2 events which have seen decent post event rallies after a 75 bps hike we might get the same but its not worth putting money on it till we see what happens. Another point to bear in mind is that S&P is at the 20% from ATH (all time high) levels which is a significant market level. Re Dax we had a good downswing from the gaps area we have spoken about the past couple of days and maintained our sequence of LL´s from that point. There is nothing to suggest we are in anything other than a bear market. Now we have tested 12600 our gateway to lower prices in the extended hours period we could get another move down to retest in the RTH. The post RTH move ended right at the D1 level we have had on our charts for some time - @ 12530. The best way imo and certainly the way I approach these days / events is to have an open mind and that's the way I will approach today. Stick with entries at good levels and set ups and play it as you normally would for the morning and early afternoon session. We are likely to move into a consolidation phase the closer we get to the event but we could also get a fair bit of volatility as traders square and or take bets on the outcome. That´s not our day trading style - we watch, wait and act on real-time pa not on what we think might happen. We can also expect some trappy action in and around the data release and the presser and its not worth risking capital till the dust has settled - tomorrow. It is difficult to predict what might happen - so best not to even bother. I´ll get back to more comment on likely set ups tomorrow - for today best to play it by ear ( or eye in our case :). Levels R1 - 12690 - 12710 R2 - 12810 - 12830 R3 - 12925 - 12950 NB: note minor zones S1 - 12535 - 12555 S2 - 12430 - 12455 S3 - 12385 - 12405* (key HTF level) Bullish scenarios Any dip back down soon after the open to the 12530 area from last night dip will likely give us a bounce long opportunity. Similarly any move over the 700 R1 zone and holding above could give us some more upside action in the first few hours where we have a fast area from yesterday to take us back up to todays R2. Holding the 12600 zone where we are sitting as I write may also lead to more upside later if we cant break and hold below. Bearish Scenarios Any move up to the 700 R1 area and a quick rejection keeps the pressure on the downside. Similarly a move back under 600 and holding below suggests more downside back to yesterdays low of 12535. Breaking under here calls up a possible test of the Key HTF 12400 level which has been holding prices since 2020. NB: regarding both bullish and bearish set ups major event days can be difficult to gauge. Take your shots carefully for today and try to have your business done in the morning.
NB. the circles are the last 5 FOMC events to show what happened in the aftermath. I've covered the S&P above where the FOMC is the key driver of what we get today and thereafter. It has been ranging this week between 3830 and 3920 on the index cash chart and needs a break over or below these levels to kick start to next leg either up or down. Whatever we get post the Fed it will be pivotal in that we either get another shot at a relief rally or more downside. We back tested the ascending trend line yesterday and it was rejected. As mentioned ( a few times :) ) the FOMC is the driver. We will see soon enough where we are heading next. Summary My MO for today is to take any good level based set ups in the first few hours and then to become more selective if trading at all until we are through the FOMC this evening. These days ca be volatile especially as we get closer to the announcement and press conference with traders being trapped in unsafe positions if they are not careful. Need I say it - we are day traders not swingers so we don't have to take any position that doesn't fit our day trading criteria. Stay on the side lines if you are not comfortable - there is nothing wrong with sitting out a session and waiting for the dust to settle. RTH Post Session Review
After a volatile initial balance hour prior to the open on Putin's mobilization and nuclear threats Dax seemed to shrug off the news and traded just about in line with what we said above. I noted that any move quickly after the open would result in a retest of the previous days after hours 12530 low and that's what we got - although we got one test before the open on Putin and one again immediately after the RTH session started. I must admit the news was quite an announcement and I didn't take the retest long instead waiting for the dust to settle a little. However we then got a move up to retest 600 a critical level we have been watching for a few months which gave us a retest short from the underside. It didn't provide much - 40 points back down to our S1 but was a trade I took - the only one I took prior to the FOMC. Thereafter price drifted back up and we had an opportunity to short R1 on a 1st test - again for only a few points on a shallow pullback. As we moved into the pm session price continued to drift higher and parked just under R2 ready for the FOMC release. Overall our plan going into today worked very well although due to the unscheduled news just prior to the open it did get off to a volatile start and it wasn't an easy day in the run up to the FOMC which I tweeted about - there was an uneasiness due to the escalation of war which could have put traders off doing anything prior to the event.
Dax40. Thurs 22 09 2022. Pre RTH Kick Off Notes Gap down in futs right from our yesterdays 12530 Support zone (being retested as I write) . Lows are held at 12455 exactly on our lower S zone (the power of S&R zones - as if we needed further confirmation!). Pcc is 12767 so watch for possible inventory correction. Data No data other than the UK official bank rate which wont have much / any impact on Dax.
Overview Quite a bit of volatility on the FOMC - to say the least! Dax 150 pts down on the release, 220 points up during the presser, 280 points down again afterwards into the US close and gap down on the Futs open! Same reactions in the US. We did say this event was likely to be a big one and set the tone going forward! Powell again clearly stated the Feds intention to fight inflation at all costs and increased the odds of a higher terminal rate by year end and early next - which is obviously being negatively digested by traders and investors in the immediate aftermath. However we can see from yesterdays S&P chart that the days after the FOMC can also be very volatile so it remains to be seen whether we continue down or stage any sort of relief rally. Today could be a similarly "big" day with plenty of action. With such a drop late last night the first thing we can expect is a push back up in the RTH which would make sense as RTH participants carry far more weight than any afterhours pa. As such I´ll be watching for an initial move back up the chart with eyes on 12600 and 12700 areas as first targets. Quickly moving all the way back up to 800 would negate all of last nights closing sentiment where we would likely get a good opportunity to short as a first test scenario. We know markets don't simply go one way on data (indeed they usually retrace) and initial longs appear to be in a good position from the open (and possibly from 8am ). Watch pa for the 1st 30 mins - hour after the RTH open to get a read for long opportunities. If I'm wrong we´ll know soon enough and be quick to change to a more shorts based scenario. At the same time we continue to be overall bearish so I will also be watching for shorts from higher prices as potential pullbacks to get on board. The major HTF (higher time frame) S zone at around 12400 is getting closer each day. Any dip down to test will likely give us a bounce in the first instance. A clean break opens up new territory which has not been traded since the end of 2020. Whether it is a sustainable bounce at 12400 given the increased threats of conflict, further restrictive / higher rates increases to come in the US and likely in Europe and the subsequent knock on effects for inflation and recession concerns is yet to be seen. But I expect 400 to hold for today and give us a good long opportunity if it is tested. Risk reward is on our side here for longs. Again if wrong that's fine - I´ll trade my plan until proven wrong. The US broke its multi day lows into the close last night - more on this below The first zone to observe is the 12550 area (being tested right now as I write) and todays R1 at 12600 - a key level. A break up over 600 opens up a fuller retrace of last nights big push down post the FOMC with 12700 mid way and 12800 at the top of the bear leg. In my view it will take strong bull power to break higher above 12800 ( at least initially) - but as ever we keep an open mind and go with the pa we get - same as for what happens at 12400. Always the best plan is to stick with S&R levels and zones and take our trades based on what happens at the prices. Levels R1 - 12600 - 12620 R2 - 12684 - 12705 R3 - 12800 - 12820 NB: note the fib on the down leg S1 - 12430 - 12455 S2 - 12385 - 12405 S3 - 12320 - 12345 Bullish scenarios Any push up and holding over our first zone of interest at @ 12550 opens up a retest of 12600. Remaining above 600 keeps higher levels in play up to 12800 the top of the FOMC bear leg. Similarly any push down to test the 400 area and a strong bounce back up could signal that we are not going below our critical HTF S. 12400 (the low is 12385) has only been tested once so it remains strong for now and I would expect it to be defended on any test today. A clean break and pa pushing lower would be very bearish. Bearish Scenarios All bearish scenarios for now depend on 12400 and whether we can regain 600 and hold above. The overall picture is clearly negative with LH´s and LL´s on H1 but the 400 level is a critical level. Breaking under opens up a fresh area as stated. My inclination for today is that we wont break under 400 ( a false break or a marginal lower low would be a great opportunity to buy) at least not until we get the US response from the FOMC close reaction later this afternoon. In which case I will be looking for an initial move up from the RTH open to test higher prices and look for opportunities to short from higher. 12600 and 700 R1 and R2 are key levels as noted.
NB. the circles are the last 5 FOMC events to show what happened in the aftermath. The S&P broke its multi day low of 3830 mentioned yesterday and tested down to 3750 overnight. Given Powell's comments and the late day reaction after an initial bounce on the release and through the press conference it needs to break back up and over the 3830 level for the bulls to regain any sort of control and for any chance of a move up. Further downward pressure calls up 3720 and lower S levels as noted on the chart down to the yearly lows at 3640 - 60. Eyes on the US open! Summary With the FOMC in the rear view mirror we now have a clear macro picture leading into year end - no let up on restrictive hikes in the US and likely meaningful hikes by the ECB given the inflation outlook and that they will want to get in front of the curve as best they can. As an aside Lagarde and her team have an unenviable task ahead. War, energy, looming recession and a highly fragmented Eurozone economy is a much more difficult proposition that Powell faces in the US. Highly restrictive policy rate rises are not equally felt across all member countries and controlling their impact is a real problem for the ECB. Nevertheless they must and in my view will hike boldly as they have no choice and will have to manage the fallout across member states as best they can. For today as mentioned we have nothing but a bearish picture in front of us. However as a day trader I expect at least some retracement of the after hours bear leg into the US close last night so will be looking at long opps from the open. If we don't get any and head lower I will look to fade any retest of 12400 in the first instance. A break and hold over 12600 seems important for today as will be the response in the US. So my plan is basically to look at retracement / inventory longs initially, consider shorts as we go given the pa and watch the US closely after it opens to see what we might get in the pm session. That's the plan, lets see what happens and as ever I will be open minded either way and solely dependent on unfolding price action! I don't mind being wrong - being profitable is all that matters :). RTH Post Session Review
As we expected and planned for the first trade of the RTH session was long aiming to retrace the big drop in the previous after hours session. I was long from the slight retest from above of the pre mkt high. If you were a bit more aggressive you could have also been long from the open level. As said we had 2 targets R1 and R2 at 600 - 620 and 684 - 705 respectively. there were @ 100 pts plus on this trade depending on precise entry and exits and whether you scaled out ( as I did and generally always do). After moving up further we had a good opportunity to attempt what was next in our plan i.e. to look for shorts to get on board the bear trend after an inventory / after hours news correction. This came right at pcc. If you were so minded you could have taken a zone to zone trade once we tested back down to R1 and then taken another short at a pike over R2 just prior to the US open. The final trade was another short from R1 once we saw that the US was trading lower straight out of the gate at the US open. A good day in total. We had a plan, we traded it and it played out. I took the first long and then scalped as per. Trust you all had a good one :) We´ll do it all again tomorrow - same time same place:).
Dax40. Friday 23 09 2022. Pre RTH Kick Off Notes Data French and German Flash PMI´s at 9.15am and 9.30am respectively. Dax usually responds to French data first prior to German specific data 15mins later.
Overview Not quite as much volatility post the FOMC yesterday but still plenty to take our shots. The news retrace bounce we expected and traded stalled at just below 12800, fell back to the 530 area and closed out the US session around 600 - all pre set zones we had been aware of all yesterday. The futs opened with a small gap up was quickly filled and has moved gradually down thereafter. My initial lean for today is that if we cant get a clean move back up over and hold 600 we test lower at our 12450 zone at some point particularly as the S&P did not make any bounce yesterday and closed out the day at the lows suggesting lower prices in the US. What happens at 450 will be critical. Break lower and we have a big decision test of 400! The first task then in the RTH is for bulls to hold yesterdays RTH lows at 12518 and the 550 zone, and push up over 600 which brings higher levels into play with a first target higher at 12700 - much like yesterday. Failure to hold @ 530 (which we are testing as I write) and breaking below opens up a retest of 455. If we break below 455 we test 400 and Dax, as said above, has to make a big decision. Breaking this 400 yearly low is a big deal as lower and we are into prices last traded in 2020. My read is that we should still expect an initial bounce at 400 if we get there, (watch for maybe a marginal lower low below 385 and or a false break scenario) and at least try to push back up. A clean break below this critical zone and holding lower takes us into new yearly territory. Another thing to watch is that, like yesterday, it could be a day of two halves with Dax perhaps waiting for the US before it makes any decisive moves. We are clearly bearish so another test of the 400 area yearly low seems imminent whether its today we will have to wait and see. Unlike yesterday then where we had a clear plan to go long from the open, I am more open minded as to any first moves. I have a bearish tilt with prices rolling down overnight and from yesterdays US session but will see what happens from the open before getting a better read and taking any trades. Our levels and zones are always the best indication of price action during the day and what happens at 600 and 450 seem to be the keys today. In a nutshell if we move down to 450 any defensive pa gives us good shots at longs and at 600 any rejection pa provides us with short opps. Breaks above or below these levels, we trade accordingly. A first test of the year lows at @400 (watching for marginal lower lows below 385 and false break pa) and I will be long. If you are not sure - just stick to the zones - they are always our best guide. Levels R1 - 12600 - 12620 R2 - 12705 - 12720 R3 - 12800 - 12820 R4 - 12920 - 12940 NB: minor zones and yesterdays RTH high S1 - 12430 - 12455 S2 - 12385 - 12405 S3 - 12320 - 12345 NB: minor zones and yesterdays RTH low Bullish scenarios Very much the same as yesterday but without our expected news retrace. Any push up and holding over our first zone of interest at @ 12550 opens up a retest of 12600. Remaining above 600 keeps higher levels in play up to 12700 and 800 the top of the FOMC bear leg. Watch yesterdays RTH high at 785. Similarly any push down to test 450 and or 400 and a strong bounce back up could signal that we are not going below our critical HTF S. 12400 (the low is 12385) has only been tested once so it remains strong for now and I would expect it to be defended on any test today. A clean break and pa pushing lower would be very bearish. Bearish Scenarios Again I can´t add much more to what I said yesterday. All bearish scenarios for now depend on 12400 and whether we can regain 600 and hold above. Breaking under 400 opens up a fresh area as stated. My inclination remains for today that we wont break under 400 (watch for false break or a marginal lower low pa) at least not until we get the US on board.
The S&P held the lower levels yesterday post the FOMC suggesting tests lower are on the cards. For the bulls to have any control they need to break back up over the 3830 level. The next key level to the downside is 3720. Summary As stated above my plan is basically to watch pa at the RTH open to get a better read. We have 450 and 600 as range levels for what happens thereafter and they will provide opportunities. The only real "clearer" trade I can see right now is to fade the 400 HTF zone as a first test. Some days pa and what might happen is clear before the open, some days it is not. Today is one of the latter where we have to watch, wait and take action along with the pa as it unfolds at our levels and zones. We will still have good opportunities with D1 ATR at just shy of 300! Have a good one :) RTH Post Session Review
I said above that I´d be open minded from the Open with eyes on 450 and 600 in the first instance to see what happens. As it played out we moved straight down from the open and tested our 450 level for around a 40 pt bounce. Worth a scalp. However we got no follow through and turned back at 500 to push lower. With a bit of too and fro at the 430 - 450 zone we eventually broke under and tested into the 12400 key htf level. I said I would take a 1st test fade and did but only for break even as it turned out as we came back down from 430 and made a clean push through the 12385 - 400 zone to test our next S level down at 345. The moment we saw the clean break through the critical 400 HTF zone we should be thinking - will this hold below or will we break back up and over. Of course we don't know what we will get. But at such a key area and with a dominant bearish market behind us the first thing to think of is taking a short on a retrace back to the 400 zone. It was a pretty straightforward retest fade as we had very obvious risk reward parameters with stops just above the top side of the zone at 410 or so. So even if we were wrong a 1R loss is all we would have to risk with the potential for much more reward. Trading as I do from levels and zones makes my risk management easy - if it breaks the other side of the zone from where I enter either long or short then I am probably wrong and take the loss. Risk is the first thing in my mind every time and 1R loss is perfectly good with me - we cant win everything! In this case shorting the retest to the underside of our 400 zone was a big winner moving down around 200 pts in our favour. Worth the risk!. These 2 trades were pretty much all I did today - I got nothing from my fade long 1sts test at 400 but did ok with the short. I did have a couple of scalps in the US session which again came to not much. The trade today was short under 400. It was another decent enough day. We had a plan to watch from the open, fade 1st test of 400 and take it from there. I did also tweet once we´d broken thorough the 400 zone to look for retest fades from the underside. Hope you had a good one. Back at you bright and early Monday :).