Plan for Tuesday, Aug.21, 2007

Summary

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ES resistance @1455-1460
ES support @1435-1440

ES printed an IDNR4 day today.

An IDNR4 day is the pre-requisite price pattern for Toby Crabel's ORB play. Also, the remainder of this week is the time window in which an FTD can occur.

So, some of the ingredients are in place for a breakout to the upside to occur. Personally, I have my own doubts about a breakout above 1460, since we are still in a downtrend, and today was the 5th consecutive day that SPX closed below the 200d SMA, which corresponds to about 1459 in ES. But I'm sure many other traders are thinking the same thing, right? And shorts covering is often what kicks off a rally.

I've never played an OR breakout before, so the plan is to watch tomorrow's OR, since I am curious to know what happens after an IDNR4 day. I personally define the OR as the overnight range plus the first 30-45 min. of the session.

In the meantime, I think I will stick to scalping for 2pts off my setups until I see this range contraction resolve itself.

- Remember to trade off the charts, avoid using IB's bookTrader for now.
- patience, patience, patience, and a little bit of discipline doesn't hurt either. It's never a bad thing to pass on a trade setup just to see how it will behave.
- keep on practicing the good habits that I've developed last week: reduce and remove, wait for my setups to setup, and don't overstay my welcome.