MARKET COMMENTARY– How the world changes and so quickly – ZOOM is a bit [pricey here, but still moving. Now, here’s how we are moving-after two tests of 2882 in the overnight session, traders have pushed past resistance to creep higher in premarket trading. Emerging markets continue to struggle with India in the spotlight as having significant difficulty. News of oil demand, China in particular, continues to lift and oil has been rising sharply since Sunday night-up 9%. Powell’s appearance on 60 Minutes made a splash – and his clear goal was to give the public confidence that they have the tools to save the day. I remain very concerned that the pressure to move rates negative pushes us there.
The dangerous long trade in the US dollar is alive and well with sellers sitting just above 100 today – range bound. Gold is still building some buying pressure but sits at the top of resistance, which means it needs a pullback. All our asset classes remain in tight channels with grinding motion north showing into resistance edges.
BUY THE DIP stays the comfortable trade – we just need to wait for entries and then trade into resistance for now.
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WEEKLY PRICE ACTION
A wide range of motion broke our support at 2900 early last week and now the buyers need to recover this region. Only the NQ_F is over the congestion range of the last four weeks and each time we have moved here, the monthly chart has sold off. This is particularly true of the ES_F and YM_F. There continues to be little to dissuade me that the summer ‘wait state’ is ahead with a WIDE range as we sift through carnage for another quarter.
PASSWORD FOR THE SPREADSHEET – NEW PROTOCOL – EmergingMarketsWatch5152020
LINK FOR TODAY’S TRADING DATA EXCEL SPREADSHEET – please note this requires a new password each week and that password is EmergingMarketsWatch5152020
TRADING VIEW & ACTION PLAN
Wide-angle range based trading continues with bounces off deep support and resistance selling at the highs or recent congestion. Support holds lower near 2787 so far and the levels near 2929-2961 look like front line resistance for now. Traders will be whipsawed trying to engage, particularly if thoughts of trending come to mind. Choose wisely.
If you find yourself being chopped up, widen your time frame or take time away from your screens. This is a time when less is more.
Intraday LONG trading from support edges like ABOVE the VWAP or tight moving averages will give you the least risk event for engaging – removing your trade at resistance will allow you to participate – understanding that countertrend bounces can be swift and sharp but will likely fail under the broken structure of the market.
Intraday SHORT trading from resistance edges like the old highs or bigger moving averages will give you the least risk event for engaging. Follow the candle trend until candles stop breaking higher.
Here’s a link to the METASTOCK software– you can have your own copy of Metastock to run these tests and setups using Target Rich Trades.
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