Holiday Week Range Bound Shake
Today’s session was just an inside day shakefest as it traded inside Friday’s range and bulls were unable to break Friday’s high during the morning rally. It’s tough to have follow through when it’s a holiday week combined with lower volume than usual. This means that there is a possibility that the entire week could be a tight range bound consolidation phase or filled with shakefest trades that have no continuation.
We may need to revert back to our shakefest strategy of scalp buy at the range low and short at range high or take the rest of the week off to rejuvenate. After all, the majority of the “easy money” had already occurred in the past two weeks and now the market entered into a consolidation phase. Knowing when to take a break in trading is an important and viable strategy in order to withstand psychological burnout and enhance performance.
What’s next?
Daily closed at 2083.25 as an inside bar consolidation and the hourly chart is still a bull pennant setup.
Nothing has changed with today’s session:
·
This is a bull train until price proves otherwise
as it is above the daily 8EMA and 20EMA.
·
As long as price remains above 2070, the immediate
targets are 2100 and 2110.
·
The intermediate target is now the cup and handle
100% measure move that targets 2128.50.
For bears: breaking below 2075 would be your first hint of bull train exhaustion and warning. If below 2070 decisively, then bears would target back to the daily 20EMA at 2064.8 and daily 200SMA at 2059.
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Weekly Chart Perspective
This week the bulls managed to retrace the previous week’s bear bar entirely, this should provide a nice feedback loop of trapped bears squeeze once price triggers above 2011.50 the November 9th week high. A straight continuation up/consolidation week first then up the next week are the probable scenarios based on the current setup. It is also a shortened week due to Thanksgiving which means we will not be trading regular size positions after Tuesday/Wednesday.
Monthly Chart Perspective
In the context of the monthly chart, August 2015 vs October 2014 formed a double bottom – this is the intermediate swing breakout bulls are looking for new ATH. Remember, the October monthly bar was a huge bull engulf that still gives the potential of a breakout the next few subsequent months as long as price stays above October’s half way candle point.
