Update: Banking 25 Points on the ES
This morning we flagged a wonderful setup in the S&P that has yielded a very nice gain to start the week. That sets us up to be a bit picky heading into the Fed on Wednesday.
Now that we’ve got a strong reaction from support, what do we do now?
Trade Update
If we zoom into the H4 chart, I’m also keeping a close eye on the 3865 to 3875 area.
The ES bottomed at ~3772 and we’ve since seen a 30-handle move off the low.
Now into the 50% retrace off Friday’s high to this morning’s low, I would be trimming down to at least a half position here (if not more for more conservative traders).
In fact, I trimmed at +10 first and am doing so again right here.
If we can clear and hold 3905, the ES could make a push into the 3920s. Of course, traders could cut down to a quarter position along the way and exit the rest in this zone.
Whatever approach works for you — either conservative or aggressive — just don’t let this turn into a loser here. At worst, a B/E stop is warranted and some may even consider going up to a stop at ~3884, the Globex low. At worst, that would ensure ~10 points on profit on the remaining position.
As always, do what suits you best. A great start to the week so we can coast a bit into the Fed. Cheers!