Cross Currents for Friday- Sept 24, 2021
MARKET OUTLOOK –MIXED STANCE and essentially rangebound as markets closed just above the deeper supports of the 2nd quarter in the ES_F. We now see a mixed bag across time frames – with tight moving averages both above and below prices depending on where you look – RANGE BEHAVIOR- ‘buy the dip’ is still in force for the power players at deep support. WATCH THAT OPENING TICK!
- Support hold steady so far at 4355
- Overnight hold of 4422
- Resistance now sits at 4435-4451
- The trade today is likely a range – use the 30min or 15min to buy the support into resistance or the reverse
- Watch for the shift of pattern with moving averages and momentum and/or the failure to break through into new highs to cancel this approach
- As old resistance becomes support, look for the images to define the support areas that make for probabilistic strength for long trades
TRADING NOTES –
*START WITH BIG TIME FRAMES TO FIND THE LEVELS THAT GIVE YOU AN EDGE
*GO TO SMALL TIME FRAMES BEFORE YOU TAKE YOUR TRADE
*LET THE PRICE TELL YOU THAT IT IS NOT GOING LOWER IF YOU WANT TO TAKE A LONG TRADE OR LET THE CHART TELL YOU IT IS NOT HEADING HIGHER IF YOU WANT TO TAKE A SHORT TRADE
**********************************************************************
Please note the different times we will meet while I am away
**********************************************************************
Register using the highlighted link above to join us for the entire week
Observations–
- FOMC release steadies the market
- Dollar stalling out to try to hold 93 after the Fed release
- Global funds bought record number of US Treasuries once again
- Natural gas fades but still very high into the northern hemisphere autumn
- Oil breaks out into the highs seen near the end of the 2nd quarter
- Supply chain issues creating the bottlenecks and driving inflation
- Gold now holding 1750 again at key support – losing this edge will give us a look at 1684 as the next test
- Bitcoin in choppy territory near 42k-43k after China sends another crypto warning
Support holds across the board with broad views show reversion to the longer moving averages on the broader landscape.
Consider the notes – remember to trade on the time frame you are considering while looking at the location and direction of your 5sma and your momentum. First, find your supports and resistance, and base your trades off of the distances to risk.
This is a chart gallery below so there is no scrolling – so click to move forward
KEEP WATCH __When we see news about the bond markets, we need to keep on high alert. And there is quite a bit of news here in the current news cycles, and traders are very mixed in what they think is ahead in the macro landscape. Remember that credit rules the world; however, the media shapes the narrative of what is happening, so pay attention to price action first- not what the media is painting.
THE POWER OF THE OODA LOOP AND ASKING QUESTIONS ABOUT THE ENVIRONMENT BEFORE WE ENGAGE
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.
Remember your OODA loop – OBSERVE, ORIENT, DECIDE, ACT
- What do you see?
- This means -is my trend in continuation or do I see signs of a reversal motion?
- Where were the buyers last engaged if they were value buyers?
- This means -is my price action far from the last region that value buyers engaged or it is in that congestion?
- Where were the sellers last engaged if they were value sellers?
- This means -is my price action far from the last region that value sellers engaged or it is in that congestion?
- Who won the last strategic price battle- buyers or sellers? This answers the big question of trend
- Have we tested significant levels of support or resistance? This answers the question of whether we are near a critical pivot
- What is the relative trend?
- This means – relative to the day at hand, who is forcing the most pressure on price? Look at your moving averages to tell you this
- Have you established risk relative to-
- 1) the last battle won and
- 2) the relative trend? This answers the question of how far you are away from strong support or strong resistance
PAY ATTENTION TO YOUR STOPS.
Let the VWAP 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 larger timeframe. 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.
**********************************************************************
THIS WEEK’S WEBINAR LINK – please note the different times we will meet while I am away
**********************************************************************
Register using the highlighted link above to join us for the entire week
This week’s calendar
********If you feel you need some help understanding how price moves, remember you have the COACH’S CORNER for video review.
Here are the TOS links for the charts
ES_F http://tos.mx/7AAOJV2
NQ_F http://tos.mx/xUUV4G3
LINK FOR THE TRADING DATA EXCEL SPREADSHEET
Video to describe how to read the spreadsheet
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 have resumed some dominance.
Intraday LONG trading from support edges oted on our charts or watching the combination of closes above your tight moving averages and your favored momentum indicator shifts positive – this will give you the least risk event for engaging – removing your trade at resistance will allow you to participate in level-to-level trading – 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 noted on our charts or watching the combination of closes below your favorite tight moving averages and your favored momentum indicator shifts negative. This will give you the least risk event for engaging. Follow the candle trend until candles stop breaking lower. Removing your trade at visible support levels will allow you to participate in level-to-level trading – understanding that countertrend bounces can be swift and sharp but will likely fail under the broken structure of the market. This means that your trades in the opposite direction of trade flow will need to be quick
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.
NOTICE: All user and member interaction and participation with TheTradingBook.com implies agreement with our Terms and Conditions