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Relief Bounce Continues, VIX Still at Lows-Sep 22, 2020

MARKET COMMENTARY – In a battle to recover last month’s lows, traders formed a bounce pattern that is carrying into today’s early morning trading. Mortgage default numbers from yesterday gave the sellers more reason to force the fight lower, but value buyers held the line. We now have an inside candle event forming today as buyers will attempt a press north into last week’s selloff range. Indices are trading their own patterns with the NQ being the strongest of the bunch. Until the buying is no longer rewarded, we will see these bounces continue into the resistance above.

Recapturing/holding the VWAP with pockets of savage downdrafts is still the likely price flow today also. Eyes on the VWAP everyday will help you keep the right side of the trade in focus. Breaching 3415-3420 today or this week will keep us in the recovery phase of this bounce.

INTRADAY -Keep an eye on the daily resistance and support that we discussed and expect battles at these regions as buyers have a lot to prove to maintain bullish price flow on monthly formations- technical damage is being repaired. BIG time frames will help you position with the wind at your back.

Deep dips remain staging grounds for buyers but some momentum damage has been done- quick strikes to support and back to resistance appear to be the highest probability for success today- dips could certainly get deeper as price action shifts to bearish mode finding to locate deeper support tests.

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This week’s calendar

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Econoday Calendar

********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

LINK FOR TODAY’S TRADING DATA EXCEL SPREADSHEET

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TRADING LEVELS

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
The big move has been downward and we are still in the hunt for support. 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 at the monthly support edges that we seem to be carving out here from August. Sellers still have the overall advantage in the short term, strengthening the chance that we slip back into the shorting zones and supports in our range near 3226 to 3156 and lower. Buyers are doing their best to force us back to the north and the breach and hold of 3420 will be ideal for them. Once this formation changes, we will look for the fades to get smaller, but for now, any big bounces we see will lead us to more selling pressure above-so trade what’s in front of you and worry about what is ahead when we arrive there.

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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