3RD POST 4-17-07

Now that the U.S. trade data has been out for a couple of hours let's look at how the action transpired in relation to what I told you for today. Question...was I right or wrong about today's action?

Let's focus on my last post:

From Eurodollar update 4-17-2007

"The up move has dramatically more volume in totality than the down move. This is another reason we want to wait for an intraday short pivot before we enter short."

"Then consider we still are not going to enter short just because price touches 3560. It must touch and pivot. I like 30min and 1hr pivots, but many times 15 min will work."

"In any event, I suspect that the real deal will be disclosed at the U.S. trade data this morning but I want you to get the idea of how I am mentally processing trades as I flow."

1ST POST 4-17-2007
"If you wait for an intra-day short pivot reversal after a pullback to 3554 like I'm going to do you will be playing it conservative as you can use that pivot as your stop which would probably cut your risk to around 15 pips on a 30min to 1hr short pivot, and place your mental stop above that pivot measuring bar. This is just me being a little conservative since I've been off for a while I'm not feeling so cowboy just yet."

"Also, consider that there is important U.S. data coming out at 8:30 am EST and you might want to wait for that instead of staying up all night waiting for a sharp move when the move is waiting for the data. Many times there is an intra-day pivot just before the news comes out to give you an indication on which direction the move is likely to take."

Then we should consider that the trend is up so this is a trade against the trend and as we know most surprises occur in the direction of the trend.

SUMMARY:

I did not enter a trade and I hope you did not either. Why...? No entry signal. There has been no short pivot reversal on the intraday charts as I write this at 11:00 am est thus, no entry signal. A trade signal gives you your bias, your entry signal tells you when to get in. The intraday pivot reversal is your entry signal.

The market did not touch 3560 until after the news was announced so there is the touch. We are still waiting for an intraday pivot reversal which may or may not occur.

Key in on this statement I made; Many times there is an intra-day pivot just before the news comes out to give you an indication on which direction the move is likely to take.

The intraday close on the 4hr and 1hr showed a bullish pivot just before the news broke to indicate the move would be up on the news. See, the big boys know before hand and can't help leaving footprints for those who know how to track.

The point is that it's not an issue of right or wrong it's an issue of flow. It's about what the market is telling you when it's time to tell you. A bias is just that...a bias. A trade signal without an entry signal to back it up it stays a bias. A bias doesn't cost you money. A bias alerts you to be on the lookout for and entry signal not to enter a trade.

So, When you click on the chart I've provided you can see that the close of the 4hr bar at 8:00 am est formed a bullish pivot and reached a high of 3552. No entry signal no how, no way. What this did tell us was that the market had set up to break upward on the 8:30 news. This is how we follow and trade flow. This is how we avoid the ego trap of being right or wrong. If the current changes we change to flow with the current not against it.

The U.S. data was considered a surprise. Surprises occur in the direction of the trend. But looking at the 4hr bullish pivot, it should be no surprise to us...

P.S. There prior posts display the incorrect time of my postings. I am on Eastern Standard Time. The blog was reporting Pacific time. This has been corrected beginning with this post. Also, I encourage you to leave comments or questions as your comments will help others when I respond to them because if you have a question/comment someone else may have the same thing on their mind.

Jerry.

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