A classic easy money gap fade on the Qs this morning. (2 minute chart above)
Qs open 49.28, up .23 from previous close and hit R1.
I always watch 9:35--9:45 as a time pivot, looking for signal reversal and possible weakness.
9:38 the Qs penetrate R1 again, but fail to close above that level.
9:40 - a reversal bar after another failed attempt to get through R1.
9:42 - bar opens below previous close, another sign of weakness and I scramble to get short.
Although I enter the SELL at 49.28, I get filled at 48.26 as order flow jumps.
My first downside target is PP at 48.81, which seems likely with the other indices showing weakness (including the IWM).
10:18 - 10:24 The Qs form a little squat bar (not quite a hairy bottom) just a few cents off the PP. I don't like the looks of the long tail doji at 10:22 and at 10:26 with the bar opening above the previous close I cover at 48.92.
Time in trade: 9:42 - 10:26 = 44 minutes
Trade gain: 49.26 - 48.92 = .34
This was a clean gap trade that turned out well.
Looking back at my lower panel trade indicators I could have taken the RSI2 90 cross at 9:32 at 49.32 for an additional .06 gain, but my trading plan restricts me from jumping the 9:38 time threshold and I've learned to stick to the plan.
Leaving .06 on the table is a small price to pay for the SELL signal confirmation.