MARKET COMMENTARY– As June draws to a close and a shortened trading week, we will see portfolio rebalancing, Fed speak, COVID news and more Central banks of the world continue plans of endless money printing. I remind you again that we are in a political cycle and ALL the news (both sides of the aisle) are driving narratives. Step back, take a breath, and separate yourself from this so that you might be able to look at price action more cleanly. We rose into the lower edge test of the 3146-3174 range last week and rejected, coming to the bottom of the channel where we are bouncing again. Ranges are in play – and we are to be calm – at some juncture – many will rush to cash – but as for now, it is a ‘Cool Hand Luke’ game to see who can stare down the Fed until the levee breaks.
We have gold in upper ranges, volatility in upper ranges, and bonds, along with the dollar, now holding steady. We are looking for another failed bounce and today begins the third bounce. So far, our swing short still holds solidly.
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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. Broken support of the 3000 level has recovered in the overnight. We are now looking at lower resistance between 3119 and 3146, as we potentially rotate into lower levels. 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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