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FOMC Minutes, EIA & Earnings Roll on- May 20, 2020

COVID shifts in the image above to the upside-

MARKET COMMENTARY-After a push up and over our 2954 resistance zone, prices fell like a stone all the way into our 2908 support zone. My thought is that the line in the sand of congestion support is still near 2895. But banging on a ceiling long enough will likely make it crumble and send us further north. Global markets have had a news heavy morning but are all holding steady. EIA ahead, more big box reports with $TGT and the like, and FOMC minutes come across the wires this afternoon. We could remain as choppy as ever.

BUY THE DIP stays the comfortable trade – we just need to wait for entries and then trade into resistance for now.

The dangerous long trade in the US dollar as traders struggle to hold us above 99. Gold is still building some buying pressure but sits in a pullback cycle once more. All our asset classes remain in tight channels with grinding motion north showing into resistance edges.

Again, BUY THE DIP stays the comfortable trade – we just need to wait for entries and then trade into resistance for now.

WEBINAR LINK IS IN THE PROTECTED AREA OF THE BLOG – Please login and scroll down for the link.

********If you feel you need some help understanding how price moves, remember you have the COACH’S CORNER for video review.

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.

WEBINAR LINK FOR THE WEEK BEGINNING May 18, 2020Chart share links for ES_F , NQ_F , YM_F , CL_F , GC_F – levels here for download to the ThinkorSwim platform – links are the same


LINK FOR TODAY’S TRADING DATA EXCEL SPREADSHEET – please note this requires a new password each week and that password is EmergingMarketsWatch5152020


Wide-angle range based trading continues with bounces off deep support and resistance selling at the highs or recent congestion. Support holds lower near 2894-2897 so far and the levels near 2961-2987 look like front line resistance for now. Traders will be whipsawed trying to engage, particularly if thoughts of trending come to mind- the markets are grinding. 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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