MARKET COMMENTARY – In a week of profit taking, charts have stalled in the midst of congestion near 3100. Shorts at the breakdown levels continue to be poor trades, reminding us that the markets are still showing initial buying strength at lower support. Repeated tests of support are not as likely to hold as the profit-taking from the last 6 weeks of upside may be engaged to do a bit more of that clearing of the decks before the next round of upside. Buyers will need to defend 3106-3098 in the ES_F as we close the week, or we’ll move into 3078-3084 where we should see another group of buyers defend those lines in the sand. Remember, as algos run price action, we can dip lower and spike higher than we might normally associate with normal pricing.
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WEEKLY PRICE ACTION
With 3120 looking like an unlikely retrace at this writing, market participants may well be in a short term profit taking space. The probable dips mentioned have arrived in the higher range between the 3097-3081 region as we did lose 3106 support before recovering. Between 3134 and 3157 are still upshot targets in the near term so long as charts can recover Friday’s close near 3119. The weekly close will be important. Positive momentum is continuing to flatten and weaken but holding. Weekly patterns remain strong as do the monthly patterns- from a price perspective. Be cautious adding to swing positions in either direction – particularly if you are considering shorts- as markets are not currently showing that short positions can gain traction at this time. This downdraft just feels like a little profit-taking for now.
COMMODITY & CURRENCY WATCH
Gold is testing lower support and looks quite weak in the current formations. We need to breach 1475 and hold it for the price action to continue north- so far, highs are bringing sellers to the party. The current range seems to present as 1456-1480 and after reversing just below 1480, we are likely to test the lower edges of support near 1461. The US dollar has stalled below 98 and leaking lower holding its overall range for the last several months. Resistance so far has been strong at 98.7 with 98.4 just below. Support is near 97 for now and holding. WTI rallied aggressively and is now at the top of the expected range and is not reversing with much strength. Resistance sits at 57.85 to 58.4. Support levels sit 56.12 to 55.6- this lower level was broken and recovered.
TRADING VIEW & ACTION PLAN
Mixed power present for now. Buyers will have more strength above 3119.75 in the ES_F which will hold as the breakout region with sellers continuing to wage a battle there. Sellers will have more pressure below 3102. Presses to the upside have been finding sellers in place. Retesting 3119 will make for another push by buyers back into 3124. Upper targets sit near 3127 to 3134 where option sellers are clearly sitting. Broadly speaking, buyers have the advantage as long as we hold 3096. The support below that is 3074ish, so the loss of 3089 opens that level below.
Be patient and wait for your setups – this means we wait for key support to engage, and we don’t step in front of moves. Understand what your levels mean and prepare for the potential behavior at those levels. Realize that we could bounce higher than anticipated and fade deeper than anticipated before returning to the trend and range – Follow the trend in the shorter time frames and watch the price action.
The theme of INTRADAY motion is:
POSITIVE AS LONG AS WE HOLD ABOVE 3119ish today (with big spikes likely fading back into congestion)
CHOPPY BETWEEN 3119 AND 3105
NEGATIVE AS LONG AS WE HOLD BELOW 3102ish today (with sharp bounces failing and deep pullbacks holding)– choppy inside the range.
Do what’s working (that means follow short trend and momentum signals while in the intraday spaces) and watch for weakness to develop away from your trade direction in order to leave. Please log in for the definitive levels of engagement today.
METASTOCK SWING SHORT – inactive
METASTOCK SWING LONG – NEW RED DIAMOND shows latest resistance ranges
Intraday LONG trading from support edges like the VWAP or solid moving averages will give you the least risk event for engaging.
Intraday SHORT trading from resistance edges like the old highs will give you the least risk event for engaging.
Follow the candle trend until candles stop breaking higher.
IF YOU HAVE THINKORSWIM, YOU CAN LOAD MY PRIMARY LEVELS FROM THIS LINK. I do not put target or secondary price levels on my charts
NEW LINK FOR TRADING DATA EXCEL SPREADSHEET –REMEMBER, WE ARE USING AGGRESSIVE ENTRIES IN THIS MARKET– If those levels have passed you, simply walk up your targets as the next entry as long as trend prevails.
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