Classic Start to Monday

Monday morning in London was off to a classic start. The overnight news weakened the stock indices, oil and the euro. The DAX gapped down a little on the futures open, rallied to close the gap and gave a very good short. The order flow was pretty clear and allowed very confident short (read bigger size) to make a nice start to the week-paying me about 250 and 500 Euros per contract as I scaled out towards my FavFib.


Today is another critical day as the lows of the stock indexes are tested. My vision this morning is for a break of the lows, but I do expect a subsequent rally that may or may not begin today. There is still some room on the downside, as I wrote last week, and this down move needs to be shaken out before we can go up. The risk for the longs is that if there is a little "too much" momentum on the downside, price might defy the cyclicality and punish them more than expected.