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Support Tests Hold as Earnings Continue- Aug 4, 2020

MARKET COMMENTARY– In our customary pattern of late, markets rise in the overnight only to give way and to fade back into support. We still hold above last week’s close in the ES_F and this will give us the line in the sand today as well. Charts broke our entry triggers long last night but dance below them today. TikTok drama continues with Kodak and Microsoft in a potential race for the US portion of this company. China in the meantime is accusing the US of the theft (also known as purchase =) of TikTok. The US dollar is finally holding support fo now. Holding the 3257 support retest gives us more upshot strength and we hold steady above this region so far. It will be our line in the sand for secondary support until/if broken. Charts could jolt sharply but pullbacks, both deep and shallow, will remain regions to buy as long as the markets hold liquidity.

Retracing to higher lows once more implies the grind higher is intact. We now show a resistance edge of 3297. The Nasdaq continues to be weaker than the rest of late but is regaining its ground as the leader. When leaders lag, we also see a cautionary tone. Amazon is showing a bit of wobbly behavior.

REDUX-Divergent undercurrents still exist- we remain range bound by my estimation but with a clear upward draft. 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.

Lawmakers are still at an impasse about a coronavirus relief deal. We look towards the employment numbers at the end of the week


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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.

ES_F Sept contract
Target Rich Trades from MetaStock

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