MARKET COMMENTARY– The end of the month and the end of the quarter usually brings some measure of volatility but our system is tracking these moves well with the notice ahead of the bounce in play. We tested last month’s region of 3057.5 and higher before fading so the strength of upward momentum is still in play. This is a shortened trading week. China has imposed rules forcing us closer to some greater rift with its treatment of Hong Kong. Ranges are in play – and volatility is still high – so spikes will occur.
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 we are continuing this bounce. So far, our swing short still holds solidly as we look for higher ranges of lower resistance to engage.
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This week’s calendar
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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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