Thursday provided some interesting considerations as we approached the bell, and we discussed a number of them in the Trade Discussion Room. Of course basically every overnight decision for me starts with the Odds Sheet, so let’s take a look at that and then I’ll discuss some other things I took into account when approaching last night’s trade decision.
We saw some evidence last night of an upside edge, as both IWM and NQ met the minimum criteria for a possible long trade. ES is what I trade, and it fell short since both Internals and Price Action Profit Factors were only marginally bullish. Other evidence was a bit mixed. A number of studies appeared in the EdgeFinder that suggested a possible downside edge. But they were primarily focused on the new high, which as we have seen, has NOT exhibited bearish inclination over the last 10 months or so. Another factor was today’s employment report. And as I pointed out yesterday, that’s been very bullish since the summer of 2012. But the extra volatility that comes with the report does add an extra element of risk as well. So with all that in mind, I decided there just was not enough pointing upwards to justify me taking an overnight trade. But there was at least one person in the room that announced they were taking NQ long overnight.
As it turned out, the employment night hot streak continued. ES gapped up 7.50 points this morning and NQ opened up 12.75 points. So more aggressive traders were rewarded.
Have a great weekend, good luck if you take a trade, and rest easy!
New to the Odds Sheets? Check out this video for a detailed explanation.
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