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Boeing & Pfizer Fuel Bounce- Nov 18, 2020

MARKET COMMENTARY -Markets hold support and bounce on the news that the 737 is back for Boeing and that Pfizer ends its trials with remarkable success. As I have mentioned all week, I still have concerns about the highs holding without a fade so I would say to use a strategy that allows you to take profit where you see congestion and watch for the failure to head higher – or the failure to head lower. The OODA loop used properly, will confirm you are seeing things the right way. It is far better to be out of a trade you wish you were in than being in a trade you wish you were not. Stay present and in the near term, and pay attention to the players before you decide on a plan. BE PATIENT AND WAIT FOR YOUR PRICES to give you the edge. Intraday formations are the ones governing the charts – so use them.

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The ES_F still sits in the breakout territory. Yesterday I took a short in congestion and sat in the trade for over five hours waiting for a retest. Wasted time – and although I did close for a profit, it was a tough place to trade. My personal takeaway? To remember congestion within a range implies the likely tests of the highs and lows of that range eventually. My overeagerness was the trouble. Key known support (3520) is almost 100 points away with higher lows are in focus near 3587 to 3582 and this region was tested twice: once in the trading day and once in the overnight before bouncing. This is a strength-building event once we test higher. Remember to wait for price action to tell you what is happening. Buyers are in charge but they will be willing to give back gains to build strength at deeper support levels in the rise forward. Pay attention to the VWAP. Once we drift below that line intraday and fail to recapture it, sellers will be bold in their attack to drive prices deeper.

The NQ_F is in a bog- sideways – as sector rotation continues…suggesting sideways action should continue. The divergence in patterns between the ES and NQ shows us sector rotation and the recent strength in YM shows that foreign money continues to move in. Consider range trading – or using tighter time frames for the smaller pockets of trend. Be careful in the moves and try not to buy breakouts before they confirm (or breakdowns for that matter) but look for the tight motion in the retrace to support before moving ahead. PAY ATTENTION TO YOUR STOPS.

The CL_F and GC_F both remain landlocked. Bitcoin is still holding its breakout rally numbers.

Watch the VWAP to help you with the strength of pressure. The loss of the VWAP will force some selling action, and the breach above the VWAP that holds will bring buyers to attempt stronger positioning.

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 present but likely to be repaired on this large time frame. BIG time frames will help you position with the wind at your back.

Deep dips remain staging grounds in an essentially sideways week prior- 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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YESTERDAY’S LIVE TRADING ROOM RECORDING

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This week’s calendar

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Econoday Calendar for this week

********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-remain the same

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
Pure breakout action showing -showing a little shallow fade currently.

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.

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Target Rich Trades from MetaStock-ES_F
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Target Rich Trades from MetaStock – NQ_F

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