A glimpse of bears
Today’s session was
quite simple and straight forward once bears confirmed their momentum by
breaking below Friday’s LOD of 2077.50. Let’s back up a little, before the day
session had opened; price formed lower highs on the hourly chart and was still
trading inside the declining price channel. It was below 1HR 20EMA, which meant
that we were leaning towards entering short trades only until price gets back
above it.
At the day session
opened, we entered shorts at 2086 initially risking 4 for 8 points target. We
added more shorts at 2083 as it broke the hourly 1PM candle from Friday’s
session. At that point, bears needed to break below 2077.50 which was Friday’s
LOD to prove their momentum. Subsequently, by 10:10AM price rolled over and
broke below that important level and confirmed the bearish momentum. At that
point, we knew that our initial scalp trade had turned into a trailing intraday
swing bear trade that targets the 2057-2060 purple and yellow trendline region.
The price action
developed into a 5minute 8EMA re-entry bear train for scalpers that worked
perfectly until noon. Long story short, the bears managed to fulfill our
intraday swing bear target by hitting the purple trendline support. Then, it
proceeded to form LOD at exactly that trendline support and the bulls began to
retrace. The hourly extreme oversold signal bounce setup was confirmed at 2066
with the usual risk 3 for 10 points that fulfilled target by end of the day
session. Not sure why we did not take the bounce trade in the scalp futures
account based on the executed 80% win rate setup, but it is what it is.
What’s next?
Daily closed at 2072.25, this is 13th consecutive
close above the daily 200SMA. This is also
the first session that closed below the daily 8EMA in 28 sessions.
Tomorrow/Wednesday could be a very important session and
based on the current price action, the market is likely to going to retest the
daily 200SMA and daily 20EMA support at 2057-2060. The first try at this major
support we expect a bounce as mentioned countless times previously. Then, we
may see an hourly lower high setup from the bears or a two legged sticksave
bounce from the bulls.
If the market gets to 2057-2060 and it does not have any
notable hourly bounce on the first try, then we know the bears are real this
time and it would confirm their momentum once again.
Possible short-term
trend change since price is below daily 8EMA, but still above 20EMA
As long as the daily bull train remains above 2055, currently
this looks to be a buyable dip on the hourly/daily timeframe using the typical initial
risk 5-7 for 20-30 points at 2057-2060.
As long as price
remains below 2085, the immediate targets are 2060-2057, 2051 and 2035.
If above 2085, then the immediate targets are back to 2100,
2110 and 2120.
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Our Swing Options
Account
- Took profits on half of the IWM Dec ITM Calls
Total = 30% Dec Puts (SPY+QQQ) and 15% IWM Dec Calls
May add back IWM calls near 116.3-116.60 which is the daily
20EMA.
