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FOMC, New Aid Packages & EIA Release Ahead- Jul 29, 2020

MARKET COMMENTARY– We have yet to recapture 3241 and coming into the Fed release this afternoon, traders are showing as quietly waiting in a range. Expect noise and distraction in the charts – more whippy retracement from the high to low of the ranges and back. Levels remain unchanged as no resolution shows. Breaching and holding 3225 will give us more upshot strength- this is where we sit currently. This afternoon and tomorrow afternoon, we will see several heavy hitters report earnings. Markets could jolt but pullbacks, both deep and shallow, will remain regions to buy as long as the markets hold liquidity.

The leading stocks still hold support but none are making new highs – this may change after the oncoming earnings releases. We need to see how/if these recapture their prior highs. Retracing to higher lows once more implies the grind higher is intact. We now show a resistance edge of 3284. The Nasdaq continues to be weaker than the rest of late. When leaders lag, we also see a cautionary tone.

Divergent undercurrents still exist- we remain range bound by my estimation. When we slip into trending zones without a proper retrace, we miss an important step in building proper volume profiles. As far as the broad market indices go, we remain in a day trading cycle with no swings setting up just yet. We will have intraday longs and intraday shorts and we will continue to take profit rather than wait for continued upside pressure. BE CAREFUL shorting between major targets – the markets are still bullish.

Gold is now in full breakout, bringing silver along with it- volatility readings are still below the 30 region though barely- making bullish action much more likely in the broad market. The dollar remains depressed and is struggling to hold its low. There is a MONSTER battle occurring in the world of currency.

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Econoday Calendar

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TRADING LEVELS- remain the same

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
We are in trending breakout but without a signal of strength. This is a cautious long grind with lots of candle retracements. As long as we hold or recover the area near 3246.5 (broken at this writing), we remain in a path that shifts us north and we are much more likely to trend back into 3300 and beyond, else we slip back into the shorting zones and supports in our range near 3158 and lower. Remember that we have no strength signals -we should be careful not to add to positions that do not move properly into targets.

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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Target Rich Trades from MetaStock

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