This is a brief post to cover today's activity. Probabilities favored an upside move into around 1:00 pm based on market structure. Ironically, the 5:30 AM timing low, as presented in this morning's 4:30 AM post, did bounce almost 5 points and within 10 minutes of schedule. However, the first signs that market structure was sloppy were the repeated tests of that 5:30 AM low. This in itself is not an issue as market structure should have some room to breath. It did indicate some sloppiness. Sloppiness in this fashion is an early sign of potential loss of edge. Additionally, at 9:15 AM before the cash open, the market broke the 5:30 AM low that severely impacted the positive biased market structure. Clearly, the probability plan as posted in the morning was at risk and likely incorrect.
The implications of such a structural break were clear, timing was still going to be 1:00 PM but odds of 1:00 PM being low increased dramatically. This is one of the reasons that modal decision making is so clean. The impact of being "wrong" is clear and does not imply a lack of flexibility or capability - but rather just the reverse. There was little reason to attempt to hold to hard and unnecessary indications when clearly "edge" was compromised and risk of adverse or downward bias into 1:00 PM timing increased substantially.
The preferred approach is to wait for high probability timing and then looking for execution potential. NOT trying to out-think the market. Too often, systems developers and traders alike think that it is necessary to do every possible trade. In fact, this causes confusion, risks more errors and does not improve odds or preserve mental capital. Waiting, while difficult, is a very productive risk management method. If probabilities are not greater than normal after all why waste effort or resources till they are. Clear thinking and planning is one of the biggest assets to bring to market interaction. Being "right" is of comparatively much less value.
There were quite a few other edges that occurred today from e-Tick-Tools that were of significant value. Capturing the 1:00 PM long potential and also, understanding that the 10:08 AM high was an area of buyer capitulation. In any case, the objective is to retain clarity and efficiency. Operating at inflection and high probability points relieves much of the over thinking we are all likely to be attracted to. Moreover, most of the time, it can be planned in advance to a decent degree.