I feel it's not easy to trade recently... bit by bit.
First, let's talk about the capital situation. The ETF that has been closely monitored recently saw a net outflow of 200 million yesterday. This is reflected in the market as well; each rebound has been weaker than the last, and the lows have been broken one after another... It seems to be the August curse, at least there are currently no signs of a short-term bull market.
For the short-term bias between bulls and bears, besides the previously mentioned continuous net inflows or outflows for three days, another judgment is whether the daily low buy points are easier to reach or the high short points.
When the market is bullish, you'll find that the points you want to wait for to buy on the dips never arrive, while every day you're reaching for higher short positions.
Conversely, it’s the same now; the high short strategy at 115.80 has been in play for 3-4 days now... This was a reasonable short point, but it just hasn’t reached it... On the other hand, after hitting 113.70 yesterday, the low buy kept testing downwards... So this is still a short-term bearish bias.
Looking at the macro side as well... A couple of days ago, I said that even though the speculation of interest rate cuts was so high, now that the expected probability for September has really been bet at 85%, the market has started to hesitate... Due to the revision of non-farm payroll data, people are starting to question the stability of the economy... They are doubting whether this interest rate cut is to save the expected economic recession (which would lead to a big drop) or simply a domestic rate cut after controlling inflation (which could lead to a rise).
But under the current circumstances with no more data, traders can only guess blindly... There can’t be any certain bets... Of course, more people might choose not to trade at this price level that is neither high nor low.
And as more people like this appear, it reflects in the current order book... I mentioned yesterday that the current spot order book is frighteningly clean... Compared to usual, it’s much thinner, with no large orders existing... So that at noon today, just using 140 CVD, it pulled the price up by 1000 points... (What does this mean? It only takes 140 large contracts' spot market buy orders, about 1,600,000 funds, to pull up 1000 points.) This makes it very easy to create volatility... (For example, contracts can be ambushed in advance.)
So now, in the middle of this, it is very difficult to read the price movement from a technical perspective... It’s too easy to be pulled up and down.
The current order book is still quite empty; spot prices need to drop below 112,000 for orders to appear. The funds from the contracts entering yesterday haven't exited yet... Sell orders for the contracts are placed between 1152 and 1162.
Looking back at yesterday, I finally got into the low buy position at 113,700, and as usual, I exited at 1,000 points at 114,700... (I had originally left 30% to gamble on 1152, but it didn’t reach, so I moved my stop loss down to 1147.) Then there was that panic wave from Old Trump’s speech in the evening... I entered a position at 113,100, hoping to make a play on the round number + breaker block. I set a narrow stop loss of 300 points... but after hitting the stop loss, it took a long time to go up... This was quite puzzling; I originally thought that after breaking 1130 strongly, it would basically go to 1121 to catch. However, it stopped at a midpoint of 112,600, neither up nor down... So I let it go... and didn’t chase after that.
Finally, today's strategy...
For aggressive shorts, it should be above 115.20 at least (this is also the starting point for contract funds)... However, there is always a possibility of a liquidation spike above, especially if there is news support... For safety, it's still best to place orders above 115.80.
So where to place orders still depends on what drives the trend. Without news support for shorting, one can aim for 115.20; with news, aim for around 115.80.
As for low buys, I'm a bit afraid after yesterday's drop... The breaker block at 113.20 and the previous low have already been tested, so I don't plan to trade it again... If I do, I’ll focus on the range of 112.70 to 112.10.
112,600 is yesterday's low point and hasn't been tested further; there should still be at least a 500-point low buy.
If it breaks down, 112,100 here is also a strong support from the previous low and should get a bounce of 500-1000 points.
What if it breaks 112,000? If liquidity cannot recover after being drawn down, it will really be unknown where it will go.
