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Caution with Positioning, Jobless Claims- May 21, 2020

MARKET COMMENTARY-Another big bounce that has faded, confirming my approach of taking profit when you see it. And look for key support to hold. Taking the short countertrend means you need to keep a close eye on your levels of support as buyers are lurking at supports. The upward thrusts have been fed by sellers who are buying to cover. The sand of congestion support is still near 2895. We have had a news heavy morning and we are back below that 2954 once more.

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 continues to look nerve-wracking 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.

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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.

WEEKLY PRICE ACTION
A wide range of motion broke our support at 2900 early last week and buyers defended the region. This morning we sit right at 2954 regions that remain a battleground. 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. The YM_F continues to be weak- a warning signal. 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

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

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WEBINAR LINK FOR THE WEEK BEGINNING May 18, 2020

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 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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