Going into this morning’s session I was wary that the FTSE had fallen strongly over the course of last week and was due a significant pullback. Additionally it was still trading within the downward sloping trend channel on the hourly. The plan of action was similar to yesterday in that I was looking to short any retracements to key levels.

Just shorted the FTSE 100 at 5964 (with a standard 20 pip stop loss) off a classic MACD divergence pattern, coupled with a previous support / resistance level.

The FTSE had fallen for 5 consecutive days so although the markets looked very bearish this morning, I was wary that we could be oversold and that a bounce was due. However, Friday was a strong downward trend day, so my initial plan this morning was to look for any pullbacks to resistance and to get short which is exactly how it panned out. I got in at 6007 and closed out for 20 points as shown below.

Key points to note going into this mornings session:

• On the daily chart the FTSE had broken through the lower trendline indicating a clear break in structure
• On the hourly chart the FTSE was at the top of the downward sloping channel

Given the factors above I was keen to short any pullbacks this morning…

I went short at the overnight resistance level of 6072 which also coincided with a pullback to the 20EMA, trailed my stop as the market fell, then got stopped out as it pushed up. Points in the bank and a good trade to reflect on; may not trade at all for the rest of the day unless I see a cracking setup present itself.

On the daily chart it looked like price had just come off that lower trendline, however, the FTSE has been trading in a downward sloping channel on the hourly chart so I was looking to get short this morning off any pullbacks to key levels.

Shots fired and I’ve done exactly that getting in at the 6118 level, a previous level of support which hopefully will act as resistance in this case. Further confirmation before placing the trade was that the MACD histogram bars were beginning to decline and price was starting to head back down.