Breakdown and Follow Through
Today’s session was relatively simple
and straight forward as the price action provided great risk vs. reward trades
for both swing and scalps. Before the day session had opened, we posted our
game plan of shorting every 5m 8ema and 20ema bear train re-entries. The hourly
chart was a head and shoulders formation with the 100% measure move target at 2036.75
as the overnight session formed lower highs. Alongside with the immediate
targets from last night’s KISS report were 2051 and 2035.
The daily extreme overbought signal was
confirmed at 9:00AM. Then, the 1HR
20EMA bear train accelerated and turned into a 1HR 8EMA train when the day
session opened. At the open, the first hourly bar closed as a breakdown bar
forming a lower low for the week. By noon, the hourly had a bearish sandwich
candlestick setup that was rejected at the 1HR 8EMA resistance. Overall, it was
a perfect textbook 1HR 8EMA bear trend day combined with 15MIN 8EMA+20EMA
re-entries for scalps.
What’s next?
Daily closed at 2040.50 and it was a
large bear candle that finished at the lows.
This is the first close below the daily 20EMA and 200SMA for the past
30 sessions.
Bears got exactly what they needed
from yesterday’s breakdown setup and they managed to have followed through the
momentum by testing important support levels.
The immediate targets of 2060-2057 and 2051
are fulfilled. We also consider
the head and shoulders 100% measure move target of 2036.75 fulfilled as well
based on that 2038.25 6:00PM low.
As long as price remains below 2068,
the immediate targets are 2035 and 2027.
The unconfirmed intermediate targets are 2010 and 2000, but we must first
see a close below the 2027 daily 100SMA in order for bears to prove their
momentum.
Tomorrow is the weekly
closing. Currently, weekly 8EMA = 2037.78 and 20EMA =2032.72. These are major support levels, which coincides with the prior 2034 prior
6 month range support before the August breakdown.
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The Daily Extreme Overbought Signal
The immediate 25-30 points down is
almost fully fulfilled, now the question remains if bears can manage an
extension up to 70-100 points down. Daily 100SMA = 2027, bears need to prove
their momentum by having a daily close below that.
The Hourly Extreme Oversold Signal
The scalp buy was confirmed at 7:00PM,
the deadcat bounce targets 2052-2058.
The Swing Options Account
-The remaining 15% IWM Dec Calls were
stopped out at the gap down open.
No open positions left in this
account.
