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FOMC Minutes This Week & More Chop Ahead- Oct 4, 2020

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

Videos below

ES_F – intraday volatility has marked the trading patterns for all the indices thus far. Pundits remain split about the direction of motion in the chart – and that usually give us quite a bit of whipsaw

NQ_F – intraday volatility is also quite present here with a retrace from 11540 to 10650 twice in the last week and a half. Traders sold quite a bit of tech on Friday.

YM_F – again, intraday volatility is present here with a retrace from 28000 to 26400 twice in a couple of weeks. The DJIA futures have staged an impressive bounce and that will make buyers bold and attempt a press back into 28390. Of the three indices we discuss, the YM_F has made the strongest recovery, retracing more than half of the prior month’s motion and yet it is still the underperformer overall – failing to hold over pre-COVID levels.

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.

CL_F – this chart is at a clear do or die state with buyers having everything to prove. Holding or recovering the level at 37 is most significant across all time frames, so the first group showing up tomorrow will be buyers and if they cannot press us upward, the fall could be 25% or more

GC_F – from the look of the monthly and weekly charts, we can see how important the levels near 1920 are for the buyers of this index. Sellers will be here first as it is known resistance but how far they push it over will tell the tale. Remember that the first passes into resistance are sellers who will attempt to take control. Buyers will only show up in force where they see prior support and feel they can take control.

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.

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. Until we breach 3415-3420 in the ES_F, this recovery bounce is suspect, but every bounce or fade can move more sharply and more deeply than we expect.

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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NO LIVE TRADING ROOM ACTION UNTIL I RETURN

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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 reviews.

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 THE TRADING DATA EXCEL WORKBOOK

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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
We remain in a large rangebound formation. Whipsaw grind with tests of both support and resistance is very likely ahead Sellers still have the overall advantage in the short term until the ES_F closes the week over 3420. Buyers are doing their best to force us back to the north by holding higher support and higher lows presenting. 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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