MARKET COMMENTARY -Bullish pressure stalls as the level near 3276 still holds as important support into the evening for traders in the overnight as technical divergence continues. We remain bullish at the beginning of the earnings season but booking gains for the majority of positions seems to be the prudent thing to do for now. Volume profiles are showing a number of dangerous regions of very thin volume, suggesting pullbacks are necessary to stabilize strength in the market. Nevertheless, pullbacks are buying zones for participants in the current environment. Option sellers are poised at 3303-3305 for expiration this week.
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WEEKLY PRICE ACTION
Positive momentum holds us in a breakout pattern after a bounce from support but we are in a stall for now. We closed last week above 3263 and currently sit well above this new region -near 3280 in the overnight. It is reasonable to assume that buyers will engage at support levels noted but continue to keep watch for lower highs or the failure to hold nearby lows to signal a change of direction. Fades into weekly support areas noted will give us good engagement regions for long action. New higher support at 3275.
INTERESTING SNAPSHOT from Koyfin -reversion to the mean likely in progress
COMMODITY & CURRENCY WATCH
Gold has faded and continues to fade into lower support regions – the next support test is 1531 and then 1513 below that provided we do not hold above 1550. The US dollar has now stalled below 97.4, making this a precarious zone of support. We are at a decision zone here, so we are in a wait state again before we position using the UUP or the FXE (representing the inverse of the dollar). WTI has reversed into deeper support regions near 58 and has been struggling there. Buyers have a lot to prove here but news of hedge funds removing bullish exposure continues to depress the price. Support sits between 57.27 and 57.97. Resistance levels sit near 63.5 to 66.97
TRADING VIEW & ACTION PLAN
We now sit in a stall -holding a pattern that suggests a broad sideways formation between 3254 and 3294. Pullbacks will be buying opportunities, but we are potentially looking at choppy markets as traders digest moves in a broader sideways formation. Broadly speaking, buyers still have an advantage above 3206- so deeper dips still make for bullish support entries. SIGNAL LIGHTS ARE YELLOW-but watch those higher supports near 3275 – 3287
The theme of INTRADAY motion is:
POSITIVE AS LONG AS WE HOLD ABOVE 3276ish today (with big spikes likely with shallow fades back into breakout)
CHOPPY BETWEEN 3254 AND 3284
NEGATIVE AS LONG AS WE HOLD BELOW 3258ish today (with sharp bounces failing and deep pullbacks holding)– choppy inside the range.
Follow short term trend and momentum signals while in the intraday trading environment 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 – Complete and stopped out- very choppy environment if we are looking for engagement and hard stops
METASTOCK SWING LONG – No swing longs in play…intraday longs off support as negative divergence shows. Only dips into 3260-3276 that recover will make for good long trades. Resistance sits near 3305.
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 EACH DAY FROM THIS LINK. Because levels change often, you’ll need to download these each day. I do not draw all secondary price levels on my charts-
NEW LINK FOR TODAY’S TRADING DATA EXCEL SPREADSHEET –
REMEMBER, WE ARE USING AGGRESSIVE ENTRIES IN THIS MARKET– If those levels have passed you, simply walk your targets up the levels noted on the spreadsheet as the next entry as long as trend prevails.
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