The 1,981 Emini support level acted like a tractor beam today. The Professionals had a plan and they were going to take us all the way down. We got to 1,982 and then reversed for a 37 point rally. Why 1,981? Cyclical support from 14-16 January.
Daily charts really don’t give us a good feel for the market. Much prefer coming down to the 135 minute chart. There are exactly three 135 minute bars in an Emini day session. And it breaks the day into three phases, allowing you to see reversal days really clearly.
After a big sell-off, like yesterday, we’ll always get some follow through the next morning. And you should wait until Exhaustion selling (on the 1,500 tick chart) before thinking the down move is over. I broke this rule on my second trade and got the pleasure of being stopped out. Serves me right.
So get back on the horse. Being stopped out tells you that you’ve got the trend direction wrong on that trade. Suck it up and get with the trend.
Good luck with your Emini trading tomorrow.