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Video Transcript:
All right, let’s take a look at today’s price action on the ES. We’ll start with the daily. Coming off this all-time high rotation and selloff into the day, we were right in the middle of that. The question was, are we going to break higher or break lower? We had two POCs that we were working off—the current week POC and the prior week POC—and the question was whether we were going to reclaim them or not. We ended up reclaiming, given this big bullish expansion on the day, instead of failing, breaking down, and retesting the lows. That bullish scenario clearly played out today.
Let’s dip down to the 1-hour. You can see Tuesday’s selloff, yesterday’s sideways chop, and overnight action. Then the dip and rip—bullish hammer candle, outside candle on the hour—extended up for the balance of the day. Now let’s take a look at the entry on the 10-minute. There were a couple of different spots to grab an entry on today’s bullish rip. Off the open, we had sideways chop coming in, then finally some real velocity. Negative 3,958—almost 4,000—more aggressive sellers than buyers on this candle. The next candle cut that in half with about 2,000. Then we ripped back to the upside.
On these three candles, this is a failed breakdown: aggressive sellers pushing the market down, followed by a strong reversal back to the upside. That’s a failed breakout. Whether it happens in one, two, or three candles doesn’t matter when you get a move this violent. Looking at raw numbers, the absolute values show a 10,000-transactional shift: 4,000 down, nearly 6,000 back up. So, you go from negative 4,000 to positive 6,000 in three candles, creating a massive shift from selling to buying and popping the market higher.
A little bull flag formed right here and broke. You take your trade right at the top. It extended to target one. It took some time; it didn’t rip as fast as I thought it might, given the volume, but it still pushed and ripped. The secondary trade of the day was right here—a little bull flag just before the close. You could take the breakout on the body or the wick. If you took the wick, it was about a 1:1—not that great. If you took the body, it was a little better, almost 2:1—1.96 with the other wick. The first one was 1.16, so that really cut the risk-reward.
Looking ahead to tomorrow, it looks like we’re going to tag target three during the settlement period. The question is, are we going to take out these all-time highs and extend further, or are we going to fail at the highs and rotate back down?
Hey everyone, it’s Dale here. I hope you enjoyed the video. If you’d like to trade alongside me and our team of prop-firm-funded traders every day, click the link below the video and hop aboard. We’re looking forward to trading with you.
