Monday’s Auction was a near perfect Range Day which saw price containment within well defined price distribution of the Initial Balance (1st Hourly Range) of 1099.00 – 1090.00. Price gapped up early only to fade quickly back to Friday’s settlement price before attracting buyers…Price auctioned back into the IB Range and found two-sided action for the remainder of the session. Range Day trade is fairly well defined but can be gut-wrenching for the amateur which calls for fading the “edges”. One of the most successful ways to handle this is to trade responsively at the +- 2 Sigma Levels (standard deviations). At Polaris Trading Group we refer to this as “fade the raid to get paid”…The chart below is the 30 min PTG Delta which clearly highlights the key levels to consider trades..i.e.+-2 Sigmas…which offered the trader a well defined “reversion to the mean” profit opportunity.
Initial Resistance: Monday’s Pre-market high at 1103.00
Secondary Resistance: 1109.00 then, 1119, 1126.00
Initial Support: 1085-1086 November / January lows
Key Support: 1080.00