My thoughts going into this morning are as follows:

• Overnight the FTSE has been trading in a relatively narrow range between 6145 and 6155.
• The last two days have seen the market rally up and continue to sell off for the best part of the day, then recover during the US session, or after market hours.
• On the daily chart the market is not far off the upward sloping trendline, a triangle pattern formation; so beware of a pullback off that trendline.

Although I was planning to short the market on any significant pullbacks, I was slow off the mark as the market seemed to sell off straight from the open, and I was unable to get on-board as intended.

I have just taken a speculative long off the yesterdays low of the day (LOD) at 6118 (MACD histogram bars seemed to be declining) and looks like I’m going to get stopped out.

Note to self … Learn to trade with the trend you fool! Don’t try to catch falling knives!

The FTSE had sold off steadily overnight at the open I was hoping to get short off any bounce up to any previous levels of support and resistance. However, ended up taking a speculative long as the FTSE came off the lower Bollinger band with the MACD histogram bars rising indicating a change in momentum. Managed to scalp a few points off that trade.

The market has since reversed off the overnight support level at 6218, creating a classic pin-bar on the 5 minute chart, and proceeded to fall through yesterdays lows of 6208, as well as the 6200 level.

Just looking at the charts below, here were my observations at the open:

• On the daily chart the market was trading below the 20MA, although we had seen the market push up from previous support on Friday, and potentially this looks like a good area to bounce up from
• On the hourly chart the FTSE seems to be trading in an upwards sloping channel, and quickly dipped back down to tested the bottom of that channel at the open
• On the 5 minute chart, the market had been trading in a tight range overnight, then headed lower and bounced off support at approx. 6249 (one of the pink lines drawn on the chart prior to the open).

As I look at the chart now, price has come off an intraday resistance level at 6283 (a red line on the chart that was drawn a few minutes ago). I think that we could be range-bound between the 6249 & 6283 levels for most of the day.

Looking at my economic calendar, BOE Governor Mark Carney is scheduled to speak this afternoon at 3pm, so expect some volatility at the end of the day.

After the sell off yesterday, my plan was to look for any continuation patterns and short any pullbacks to the previous days highs, lows or support and resistance levels. Don Miller trades this way on what he calls MATD (morning after trend day) and I had that very much in mind before the open.

Managed to stay out of the market most of the morning and then saw a textbook setup – pullback to the 20 MA and at the same time the MACD histogram bars were decreasing and looking to go from red to green. Instead of going short I’ve gone long looking for the market to continue upwards till lunchtime, or when the US markets open.