The FTSE struggled for the rest of the morning before running into support near yesterday’s lows, formed a double bottom and staged a small recovery over the afternoon session. I took 11 points from this mornings second trade (see the tweets below) and managed to grab another 10 points from a trade this afternoon after noticing the MACD divergence and entering once price had pushed past an intraday resistance level.
The FTSE managed to recover during the after hours session forming a double bottom on the hourly chart, and was trading up as far as the 6160 level overnight. At the open it was a similar scenario to yesterday with a sharp fall at the open. I managed to get in a small scalp as the market pulled back to the 20EMA and closed out at the overnight support level. Just taken a counter-trend trade off the 6100 level which really needs to turn up from here. If it falls back I may just cut this trade early.
The FTSE continued its decline from this morning’s session and despite a small recovery after lunch it ended up sub-6100 at the close. I managed one more trade this morning which was a counter-trend trade off intraday support (ideally I should have waited for the market to test the 6100 level) and was swayed by a little class-B MACD divergence pattern that was developing at the time. This afternoon I managed to get back in sync with the market and shorted off an intraday resistance level with MACD divergence (in the opposite direction) which worked out.
Start of the year and we could be in for a red candle day with the FTSE selling off overnight and taking another sharp fall this morning at the open. Looking at the higher time frame charts the FTSE is still within the downward sloping channel on the daily, on the hourly the decline has accelerated noticeably as its fallen out of the channel it was previously in.
My initial premise was to get long this morning as the first trading day of the year tends to be bullish, but I hesitated and waited for the market to retrace to the 20EMA, then got short trying to stay in sync with the trend. Closed out the trade for 25 points as the FTSE rallied back up off support, so a good start to the week.
