The
Consolidation Continues
Today’s session was quite intriguing during real-time and in retrospect;
the market broke below the bull pennant support during the overnight session
with the 3AM large hourly breakdown candle. The bears managed a 1HR 8EMA
rejection train until the day session open where the first try at 1HR 20EMA
provided a great short entry.
We shorted near the 2078.5 high with an avg of 2076~ for the bear target
of 2059-2061 based on overnight lower high shoulder breakdown pattern.
Subsequently, during the next hour the market retraced the opening hourly bull
bar fully but bears were still unable to break below the overnight low of
2065.50. By 11:30AM, the 30minute bar closed as a huge bull candle that
retraced the previous two bear bars. This meant that the retrace was too much
and a squeeze was very likely as bears were trapped and thus the feedback loop
of shorts covering and buyers chasing began. This also reminded us of a popular
phrase that Corey Rosenbloom often says, if something should happen, but
does not happen, then it often leads to a bigger-than-expected move in the
opposite direction. Once the market triggered above the 2078.50 morning
high the squeeze was confirmed and the rest is history.
Quick Self-Reflection
Last night, we had a game plan of trading the possible consolidation
phase of this holiday week using the strategy of buying at range low and
shorting at range high. We did not follow our predetermined plan and got lured
by the market thinking the overnight breakdown would provide the bears follow
through. At the end of the day, this week is still a mid to high probability
holiday shakefest week that lacks follow through on hourly breakout setups.
What’s next?
Daily closed at 2084 as a doji candle that was sticksaved at the daily
20EMA support.
Still nothing has changed with today’s session, the consolidation phase
continues:
- 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 2070 would be your first hint of bull train
exhaustion and warning. If below 2065 decisively, then bears would target back
to the 2059 support first and 2045 for extension.
---
We will be taking the rest of the week off trading/posting as time is
better spent rejuvenating and avoiding burnout than trading “hard money”
setups. The KISS updates will resume on the weekend/Monday.
