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Attempting a Second Breakout – Jul 31, 2020

MARKET COMMENTARY– The big guns of tech did well enough to keep traders moving along to the upside, and for the second week, we attempt a breakout to the north. Leaders still have no new highs to show but the charts are trying to resolve above congestion. Overnight, we have once again faded from the highs but sit well above the lows. Levels remain unchanged as no resolution shows. Breaching and holding 3257 will give us more upshot strength and we battle here currently. Markets could jolt but pullbacks, both deep and shallow, will remain regions to buy as long as the markets hold liquidity.

As before -The leading stocks still hold support but none are making new highs. Option sellers have been doing well this earnings season. 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.

REDUX-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 a full breakout, bringing silver along with it- volatility readings are still below the 30 regions as traders throw caution to the wind- making bullish action much more likely in the broad market. The dollar remains depressed and is struggling to hold and has been breaking lower. There is a MONSTER battle occurring in the world of currency.


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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.

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 (holding 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 3188 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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