ASX Morning call 31st July, page-11

Without access to a trading desk its hard to explain and imagine. At the open there are a couple things going on. Punters, mum and dads buy at the open based on talks they have with friends, afternoon mushing. So if the market goes up and the first 5-10mins keep going they keep buying.

Above yesterdays high is stops because if you get a chance to see open orders you will see short stops are above yesterdays high. These trades don't get hit in overnight CFD trading because they are market orders and only execute during cash open. Thats what give you the pop. The level I plot are pivots and all the big boys trade cash level pivots. I had to make my own indicator you can calculate them your self but you have to do it everyday. Most indicators are completely useless on index markets due to poor data, gaps liquidity spikes. You name it invalidates all of them.

The third thing that made it fade quick was traders long on Friday just saw their positions hit BE as the price ticked up to Fridays close and closed the closing gap.

So that is pretty much how it works above yesterdays high.

When I do the same trade with a doji close so cbol and yesterdays high very close I always trade with a view the the fade might pop above yesterdays high or low and can go to r3 s3.