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Failure to Hold Highs & Busy News Day Ahead – Feb 17, 2021


MARKET COMMENTARY
– In a news heavy day ahead, we greet the midweek with a watch on the lows of yesterday. Midweek will often give us the view of the end of the week – if we hold the lows in the ES_F, we will likely hold the lows into the weekend and we will press higher. More companies are dipping into the Bitcoin pool and MSTR had another offering that they directly converted to the cryptocurrency. Mortgage applications, business inventories, bond auctions, and FOMC minutes.

We are still in a breakout formation that defended itself with retests of support that hold-so far, we hold above 3888-KEY SUPPORT.

If you are newer, read The OODA loop. If used properly, it 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.

**Buyers are attempting to hold control after the fade into 3880- we hold in a bullish formation testing 3914 and 3924-3950 into Feb expiry, BUT we could easily chop back and forth with thin profiles still in play. We have higher levels into 3972 now showing. 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 sits just under the call wall at 13992 regions -a positive gamma formation also holds at the traders attempt to push past 13900. Setting trades long at support regions remains the highest probabilities for all our indices. Only after seeing a failure to recover support should we be bearish in our approach to trade positioning. ZONE IN ON ARGUMENTS AT THE VWAP. They will determine future slope and direction. The internal participation levels continue to be mixed here so new highs within the index seem to be fading in some places while holding in others.

PAY ATTENTION TO YOUR STOPS.

Bad weather pushes the CL_F into 60 after the latest failure of power in Texas. Some are suggesting buying to cover is the reason for the oil drift up. Their relationship is in a patch of being in tandem rather than inverse so be careful trading the normal inverse relationship. This relationship sometimes disconnects sharply.

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 for buyers- quick strikes to support and back to resistance appear to be the highest probability for success today- dips could certainly get deeper and spikes could get higher as price action shifts.

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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-to be updated later today

LINK FOR THE 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
Pullbacks can be deep-once support lines get lost – the lines will shift. Buyers are in a battle to resume dominance.

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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