MARKET COMMENTARY– The bullish backdrop of the new moon continues as traders are hopeful with the rise of business activity. A mixed bag of news yesterday with existing home sales falling (no surprise there-no-one wants to look at a home where Covid might lurk), and fears over government stimulus ending did little to quell the march upward yesterday. That said, it has been a grind upward with risk clearly present in the formations. We are rising into the test of 3146-3174. Close the swing short at break even. Do not let anything go against you in this environment. Gold continues to hold above the breakout line. The line in the sand of 3112.5 for intraday support still sits and holds. New home sales and the PMI composite are ahead.
We have gold in upper ranges, volatility in upper ranges, and bonds, along with the dollar, are rolling over. We are looking for another failed bounce and this is in progress. We will rise higher if this happens.
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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.
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 near now holds deeper below near 2998-3112.5 so far and the levels near 3138-3157 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 with monster volatility beginning again. Choose your entry wisely.
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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