New Year - A New Kind of Volatility?

World markets saw dramatic moves down after negative news from China.  I got to the charts late (5pm).  Dax was down and I looked for signs of continuation lower or for a reversal.  All I saw was a listless drift sideways. US session wasn't too different gapping down big (30m).  The open started a push down (5m), but then recovered,  Just before the 11pm red report was another effort down but that too recovered.  Both "stole" 2 shorts I normally would've tried.  The gap down was so large it was prudent to assess the open and get an idea on the mood.  I always sit out red reports so the 2nd LH was not really a missed trade, but I would've preferred if it tried to rally and fail to get me trying a trap short.  By the time the 3rd LH arrived I was hesitant to enter due to the lack of clear bias.  I decided to await a deeper cpb sell closer to 17000 (YM 5 min).  Instead it dropped from there and ended up being my best chance to make something of the day.



The 1m chart shows the detail of the sell - steady move up to test the previous LH.  The range chart shows the top was put in followed by a price failure for a clear entry.  The turn was clear but my fixation on 17000 made me wait for the failure there rather than taking the entry off of 16980 instead. Nothing wrong with the look of the setup - it was a miss based on my disinterest to jump in there. My thinking at the time was that all sells were potential sucker plays.  Had there been a few traps or buyside failures I would've felt I could enter safely against countertrend buyers.  As it turned out the sells worked as though it was an easy trend-pullback condition.  I can argue the news was bad and caused the pre-market downmove so the sellers were clearly in control and so I should've been hitting every sell that came along.  Problem was from the lows it all appeared sideways rather than a display of seller dominance.  



Just cause the pre-market moved down strongly doesn't mean it'll easily continue down after that - many times these extreme gap moves are used to draw in late sellers and then the big boys reverse it on them all.  Looking at the 30m in hindsight it appears that is exactly what was done, those early lows were not breached and the mkt actually closed up.  Anyway, the sell is marked and worked well, but I know why I held off on taking it.

Result: No trades despite the bearish sentiment to the day.