I was way too lazy this morning to write the morning game plan. It is not professional at all.

1. The Dollar index is still trading in the range waiting for a break out. The odds of upside break out is higher than a downside break out, hence we are going to make that as our base case. 95.70 has been tested this morning during Asian and strong reaction was found. So long as 95.70 holding, we are going to keep our bullish bias and look for buy setups in Dollar index.


2. The Euro is bearish that the attempt to trade back into last week's value range has been rejected. look below, there is a double bottom weak structure sitting not far below current level, which is saying that the low is very likely to be run out today.

3. Pound is also bearish that the path of least resistance is to the down side seeking toward the 127.2 expansion of the Monday down leg.

Today's bullishness is pretty much a continuation of the strong close yesterday.
This correction started since last Thursday is the biggest bearish move we had since July.
Both ES and YM has challenged the 5 day VWMA today, but failed to break it.
The most likely scenario coming forward is for the indices to take a breath and build a base around the 5 day VWMA to store energy for another leg higher.

From today's price action, we can see the bullish drive fizzled when ES traded into 2900 level suggesting a lack of energy to drive the price much higher. If ES could spend the remaining days of this week consolidating below 2900, we should be able to restore the energy to break to new high.

DXY look above and fail.
This could start a new trend to the other direction.
Tomorrow's session would be critical for the intermediate term trend in Dollar and Euro.

shrekchenbin 

Today's bullishness is pretty much a continuation of the strong close yesterday. This correction started since last Thursday is the biggest bearish move we had since July. Both ES and YM has challenged the 5 day VWMA today, but failed to break it. The most likely scenario coming forward is for the indices to take a breath and build a base around the 5 day VWMA to store energy for another leg higher. From today's price action, we can see the bullish drive fizzled when ES traded into 2900 level suggesting a lack of energy to drive the price much higher. If ES could spend the remaining days of this week consolidating below 2900, we should be able to restore the energy to break to new high.

With the massive "look below and fail" bottom reversal pattern in yesterday's European equities, we might see a bullish rotation to revert the short term trend to the bull side for a few days at least. Because the market has been too short in the last a couple of days and an inventory adjustment is needed. Yesterday's NY session bullish drive was a result of the short covering/squeeze.
Today I would like to see the European index to pullback to the low to retest 3280 area to suck in more weak shorts before ripping higher. As of now the book is too long as a result of the panic buying of the short term momentum seekers yesterday.
In order to trade the rotation, I suggest you trade FESX or CAC instead of DAX as DAX can easily run yesterday's low and stage a 100 point deep stop run in the current thin liquidity environment.

so far (!) dax seems to be giving up runing lowers stops well below yesterday's 11800 gross low level.

AND

in light of this morning action/chop and of the nearby overhead naked pocs of NQ

would you perhaps add any upgrade to your current morning prep. ?

Thx very much.

Guidoisot,

The FESX is still balanced with a slight bearish tilt.
It seems that the US equity indices are kicked out of the balance to the down side, but it could easily be a pre-market fake swing which set up by the market maker to buy at a lower price.

So far I don't see reason to turn outright bearish, but the outlook to the day type could be updated to range bounding neutral day instead of bullish rotational day.

guidoisot 

so far (!) dax seems to be giving up runing lowers stops well below yesterday's 11800 gross low level. AND in light of this morning action/chop and of the nearby overhead naked pocs of NQ would you perhaps add any upgrade to your current morning prep. ? Thx very much.

ES sit at 2876 support. This level had multiple touches in the last few days.
If it were to break, then this consolidation range is confirmed as a re-distribution range.

EuStoxx not that bearish, to be honest.
A big iceburg order appeared at 3280 level which I have mentioned this morning.
So long as this strong bid holding, I am going to maintain my non-bearish bias.

Now we are below that held bid. Bias to the down side.

shrekchenbin 

EuStoxx not that bearish, to be honest. A big iceburg order appeared at 3280 level which I have mentioned this morning. So long as this strong bid holding, I am going to maintain my non-bearish bias.

Can't help thinking, it is so cool that we are having a rout of this scale today.
ES is trading in the vicinity of 2850 key round number.
It is the place that I am willing to buy in large quantities of ES.