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Free Fall-Giving Back August-Sep 8, 2020

MARKET COMMENTARY – Buyers have been thwarted in the attempt to bounce higher but we are sitting at support regions across all the indices in the freefall last night in the Nasdaq. Tesla fell 15% after its failure to be included in the S&P 500. Trading is likely to be very whippy at the open with fierce pockets of buyers and sellers trying to stem the tide. Volatility will spike. The $DXY is stretching into our test if 93.26 which will make for another battleground between those expecting lower levels and those recovering from the bounce but that will affect our commodities for sure.

Moving to recapture the VWAP with pockets of savage downdrafts is still the likely price flow.

INTRADAY -Keep an eye on the 4-hour resistance and support that we discussed in our study webinars and expect battles at these regions as buyers have a lot to prove to maintain bullish price flow on monthly formations- technical damage continues to be extreme. BIG time frames will help you position with the wind at your back.

Deep dips remain staging grounds for buyers but momentum is clearly against them in the short term- quick strikes to support and back to resistance appear to be the highest probability for success today- BUT dips could certainly get deeper as price action takes little time for moving into support tests.




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********If you feel you need some help understanding how price moves, remember you have the COACH’S CORNER for video review.

THINKORSWIM USERS –Chart share links for ES_F , NQ_F , YM_F , CL_F , GC_F – levels here for download to the ThinkorSwim platform


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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 retrace of last month’s support levels as traders (buyers in particular) will need to strengthen their positions to defend the tests of deeper support. This means that deep dips could continue before a move upward takes hold. This is a whipsaw grind with tests of both support and resistance ahead and we are seeing how savage the retracements can be, but bullish traders will attempt to be bold once more. We hold below the area near 3451- 349- giving sellers the overall advantage in the short term, strengthening the chance that we slip back into the shorting zones and supports in our range near 3291.75 to 3226 and lower.

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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