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The Week in Review & Looking Ahead- Oct 4, 2020

MARKET COMMENTARY – Reminder -I am officially on holiday until I return to the mainland on Oct 18 to my office.

Recap of the monthly closing formations will provide us with a good backdrop for next week. Remember – filter noise and news out of your equations and ask yourself to simple questions.

*If I were the buyer in the exact situation that I am looking at right now, what would I be setting up to do next or to continue doing?

*If I were the seller in the exact situation that I am looking at right now, what would I be setting up to do next or to continue doing?

Those two questions answered correctly will give us the direction of the market intraday. If we are wrong, we would have managed our risk and we either set up a trade in the direction that is now showing or we wait for the next setup we like.

I will put up the calendar and the new links and trading levels up tomorrow once I see how the market is behaving for us

Here’s the market image for Friday – even though most of tech closed up for the week, we definitely see profit-taking in tech on Friday

Let’s break the ES_F down first –

ES_F – Wide ranges with the rejection of upper edges near 3400 and bounce off lower edges near 3231. This still means the outcome for us will be a trading whipsaw.

Here’s the NQ_F review – expect buyers to defend lower edges

NQ_F – Buyers are definitely still banking on tech- just look at how much higher we are from the COVID breakdown. However, profit-taking on Friday was a bit jarring. We are still range-bound but traders are pushing on the edges so be very careful taking reversals. This pattern we see still means the outcome for us will be a trading whipsaw with buyers sitting patiently at the bottom of the fades. Bounce areas remain 10920 and 10650 – resistance zones remain 11585 and 11815. Breaching the upside of 11535 will bring 11689 into view with a higher probability of 11815, but anticipate sellers waiting at the upper edges of the days/weeks.

The YM_F looks much like the ES_F but of the indices we watch, it has not recovered over pre COVID highs

YM_F – Of the three indices we discuss, the YM_F has made the strongest recovery of the beginning of the month September fade, retracing more than half of the prior month’s motion and still sitting above the 50% range of August’s candle. Remember that strong big money traders have clear direction written into their mental process. We just have to find what they are doing and follow them. Bounce areas remain 27094 and 26424 – resistance zones remain 28000 and 27741. If we expect an area to fade and it breaches – it is doing one of two things – failing a bounce or breaking resistance. Act accordingly after you have discovered the actual event occurring.

Here’s a look at the CL_F

Because I suspect that GC_F is being affected significantly by the dollar whipsaws and remain largely landlocked, I recommend leaving it alone for now. The trading levels have not changed. Gold will be at the mercy of sellers if they can push prices below 1887 and find brave buyers above 1921. For oil, we are rangebound until the buyers take hold of 43.56 and close above that zone or below 35.

As a reminder, there will be no live webinars until I return. I will be posting a series of small videos after this blog post that should help navigate the terrain ahead. I will try videos again when these winds die down.

Recapturing/holding the VWAP with pockets of savage downdrafts is still the likely price flow as the days continue in a choppy fashion. Eyes on the VWAP every day will help you keep the right side of the trade in focus.

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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