I think I may have finally seen a good example in the market of Don Miller's concept of, 'morning after trend day,' MATD.
I don't know if it is true that there have been fewer trending days lately, but it seems like it to my limited experience in the market. It may just be that I am more observant of trend vs range than I was earlier.
Monday trended, I was surprised. Today opened with a gap up and it looked like a strong trending day was going to continue yesterday's trend day. But seriously, how often does that happen?
So Don has a theory that often, the day after a trend day has traders psyched up for more trending. There is an attempt made to trend that fails and is able to be faded.
It looks to me that this is what we have here. This chart is NQ 5m and the nice bullish pullback that continued up sure was a strong bullish move and then ouch. A continuation that failed with a long legged doji and it looked, at the time, that bulls could be pissed off by that. Looking back, it seems they were and the gap was closed by a ten point drop from the top.
Don is away for a week, I wanted to ask him if this is what he means, but I am certain enough that I can post this. If it weren't for the flooding over here I would have sim traded this with a short under the bar that closed on it's low. OTOH, it is at support in an uptrend, so you would have to really believe in MATD if you were going to counter trend trade this baby.