I will post some stock charts over the weekend - I have had a few good gap trades this week (and hopefully a few more to come). Here is a chart of the NQ from yesterday - the volatility is presenting some great opportunities. But a chart is a chart is a chart, so it doesn't matter if it is NQ, RIMM, WMT, or anything else - the same principles apply.
Here is what I saw:
1. A gap down and rally to the 50% retracement. Price broke through that level and immediately reversed with a bearish red candlestick that closed back below the 50% level. The next bar was narrow-range and could not rally to the halfway point of the previous (wide-range) red candle. I took this as a bearish sign, and entered short on a break of that bar's low (indicated by the first white arrow).
There was extra risk as the green candlestick closed back above the 50% retracement, but (in my mind) it was offset by what I outlined above.
2. My target was the morning low. I covered on a break of the bar indicated by the yellow arrow on the chart. This was a bullish reversal - a down red candle followed by a green candle that closed above the halfway point of the previous bar (long-time readers know this as a version of what I call "offsetting bars"). At that point, I locked in 30 NQ points.
3.) I entered short on a break of the candle with the long upper tail (indicated by the second white arrow). I thought price had the potential to move back to the morning low, but I placed my target more conservatively at the pivot where I covered earlier.
Overall a great day with 50+ NQ points.
edit - long-time readers know I use "candlestick", "candle", and "bar" interchangeably. And, while there has been a lot of point potential in futures with the recent volatility, keep in mind that you have to adjust the size of your position due to that same volatility.
Waterton Lake Eclipse
16 hours ago