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Indices Approach Key Resistances-Holiday Volume Ahead -Oct 12, 2020

MARKET COMMENTARY – Reminder -I am officially on holiday until I return to the mainland on Oct 19 to my office.

Tomorrow will be Columbus Day or, the more politically correct, Indigenous Peoples Day. Whatever the case, the markets will be exhibiting lower volume as it is an often observed holiday. I believe Canada is also celebrating their Thanksgiving Day as well, so North American volume could be lighter than normal.

We had a sharp rally into the prior monthly closes and as the Sunday markets get underway as I write, we see a little pullback off these levels. Buyers remain quite enthusiastic. Some voices in the Twittersphere are very bullish and others are very bearish – and political battles in the media also give us this wide range of bullish and bearish extreme for the future of the charts. Again, these extremes often deliver sharp swings in both directions but as I see it, being above 3420 was the bullish level we needed to recapture in the ES_F and it will likely be the region we need to retest.

I’ve posted a look at the charts in MotiveWave to show simplicity of price action and what our considerations need to be over the coming days.

ES_F – a bullish chart but a big breach to the higher green lines will likely bring exhaustion and downward action. All pullbacks will run right into buyers waiting at key support zones. The trend is still quite bullish so getting in front of the move is ill-advised. Just trade with the motion
NQ_F – the line of sellers can be seen from all the selling wicks to the left- see the arrow. As with the ES_F, a big breach into the 11844 area could push the envelope but exhaustion also likely there as we had in the 11560 area. As above, the trend is still bullish so be careful taking breakdown trades.
YM_F continues to recover well with a breach into the green lines shown as likely on the horizon with a fade after- or (and this is true for all of the charts) – a fade that bounces off known support and recovers to head higher
CL_F – several articles this weekend came out about the extraordinary value event sitting in energy right now. I agree (though I believe the move to battery technology and alternative energy is the better bet) – but this will likely have an effect on the upward motion of oil to retest the area near 43. I would trade the fade downward until it stops – then look for support to engage long
GC_F – at a do or die here after several tests of the breakout line. If it holds, we’ll run the $20 up, if it fades, it could fade sharply. Use smaller time frames to time the entry or your risk might be wider than it needs to be. I would wait for the confirmation over/under this line. It could also turn into a wide range of noise, so be careful

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. To do this, follow the trend until it breaks

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.

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.

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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– TOS being problematic here today – no links for the charts. I will try again tomorrow. Trading levels are in the sheet below.

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
Buyers are moving to challenge selling territory but they still have the advantage.

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.

Target Rich Trades from MetaStock –

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