Thursday saw the market basically breakeven. So people that don’t monitor the market during the day probably thought not much happened. In fact, it was another very volatile day which started with a gap down of 22 points for ES and ended with a small gain. When it was done, the Odds Sheet looked like this.
Four of the six index securities we track met the minimum criteria for a possible long trade, and saw their Averages highlighted in green. This included ES, which I trade, its counterpart SPY, and two other futures contracts. Meeting the minimum long criteria meant that I was open to considering a possible overnight trade. The EdgeFinder did not provide any conflicting evidence, but it showed up blank and failed to provide confirming evidence. Seasonality look very good, and I sent a special report to subscribers that broke down those seasonal numbers a bit further. The report supported the numbers shown on the Odds Sheet. So with ES green, no conflicting evidence, and some other index securities also showing bullish odds, I elected to take a long position overnight. When Seasonality is strong, I typically use the X Target. Volatility has been sizable so both the stops and targets shown on the odds sheet were much larger than usual. Therefore, I determined I would use the standard stop, calculated at 28 points, and the X Target of 32 points.
The night was a terrific one for overnight traders, and though my 32 point target wasn’t quite reached, ES did managed to gap up 27.75 points overnight. I made just shy of that, with a 27.50 point gain. NQ traders would have done extremely well also, as that gapped up 62 points Friday morning. The 27.50 point gain was the largest overnight win I have had since opening Overnight Edges a couple of years ago. Recent volatility has been a bit scary. But with trading it is important to have the fortitude to take trades when strong edges reveal themselves as they did Thursday afternoon, even if the market does appear somewhat scary. All trades obviously don’t all pay off like this, but it is nice when they do.
Good luck if you trade tonight, and rest easy.
Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine! Check out the full article here.
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