Wow, what a day and night from yesterday to today. Yesterday market reached a new low and formed a doji or hammer bar. Overnight the hint of a possible budget and debt ceiling deal moved everything higher. ES opened today with a 18 point gap. It pushed up and never looked back. My expectation for ES was it would trade around 1677-1681 of CHVA but more likely fill in 1665-1670 of the CLVA while waiting for the final deal if any. Without any confirmed deal ES kept pressing ahead and made 38 point advancement including the gap. It's the 2nd best day of 2013 after Jan, 3rd.
Things I did right today:
1. Remembered risk control first. I didn't take 1685 or 1690 calls although it was about 30 points away from this morning's view. I didn't enter any call sale position for the next two weeks since I expected more upside to come with a deal from DC.
2. I didn't over react to this big push, rather I was slowly adding my tomorrow's expiring position.
3. I was relatively calm.
Things I didn't do well.
1. I under estimated the potential of this move. I didn't re-draw Fib retrace which could tell me 1683 was Fib 50 RT.
2. My bias led me to enter 1695 and 1670 scalp too early.
3. I didn't think differently from the opposite direction. I could have sold puts below the gap to scalp and get the same result with more safety.
4. I still feel the fear of missing when I decide an entry order which cause me to lower my entry level. Instead I need to wait for the price come to me.
At this writing of 11pm, ES pushed cross 1 point of RTH high at 1688. Fib 62 RT is at 1693.5 and a weekly R/L at 1695. We may blow off these level with any positive news tomorrow. I need to manage my risk of 1695 and 1700. I may add one more to 1695 at $350 and close the position on any weakness tomorrow.
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