A Sudden Drop 1-27-15

My plan:

Indices futures dropped to ECB announcement levels overnight. Pre-open ES, NAT and RL are down 25, 63 and 14.4 respectively. Is it the revisit of the break out area or the continuation of recent down trend. So far it appears both in play. Despite the large drop, the indices are still in balance area. I will wait to see if we are going to break down further or stay in the current range. I think it's the later since FOMC is tomorrow. This may be the big guys clear deck again. I shall be trading far OTM in indices today.

Grains recovered slightly overnight. Wheat tested the edge of CLVN at $518 o/n and moved back to yesterday's range. It may be building a bottom here if a retest low or a bread down met with strong rejection. My plan is to continue managing risk, reduce size.

My execution:

ES retested ECB break out area in the morning. My hypotheses were played out. It would go down to test the ECB b/o area and ramp up to be ready for FOMC.  But I didn't execute it well as I was not patience and confident enough to see the last thrust to the ECB low. I placed two ES bull puts and moved prices around to follow every small move of the ES. I ended up get filled early. My original prices based on chart analyses would have been perfect. Of course market doesn't play perfect each time. My rule, however is to wait for the market come to me. I later entered another ES bull put for Feb week 2  at 1880. I was too eager to make a quick trade and fit a strangle. Other than ES, I sold a RUT March 1010 put based on Karen's setup. Many of my RUT credit spreads didn't get filled. I will have to go back to Gaven's book to see how can I trade better with credit spreads.

Grains gave up overnight gains by closing. Wheat tried to pull itself up earlier as I was hoping to see a bottom building. It gave up all the gains at the closing. Now I get to expect another leg down to 510 area in next few days. I placed couple risk reversal orders but no fill. I am OK with corn and soybean positions so far. Only one wheat Mar $680 bear calls closed today.