The Sticksave Shake
Today’s session was very simple in terms of risk vs. reward the morning then it got a bit tricky in the afternoon. It started with the overnight blue channel resistance that gave us a high probability morning short trade at 2084 for the 2075 immediate target.
When the day session opened, the market quickly rolled over and broke below 1HR 20EMA signalling the end of the mini bull train from Friday’s session. At the time, if the bulls couldn’t hold 2072 support (1HR 50SMA) on the first try then the 2065 (61.8% fib retracement) was the next target for the intraday bears. By 11:30 the bears fulfilled the 61.8% target and shortly after the hourly bar closed as a large bottom wick. This meant that the temporary bottom was likely in and a deadcat bounce to 2076 then 2080 was in the works. In the next 3 hours, it was a consolidation shakefest; the market was trading inside this hourly bar’s 2074.50 vs 2064.50 range. During the final hour of the day session the bulls finally broke above 2074.50 and the quick squeeze fulfilled the 2080 target.
What’s next?
Daily closed at 2081 and above 20EMA as the bulls managed a sticksave in the final hour.
There is still no immediate target since it’s just a shakefest hovering around the daily 20EMA and blue price channel. There is no edge here, but only a slight bull bias because of the context from the weekly and monthly charts.
The swing bull scenario is that this is a triangle/higher lows formation with daily 50SMA as the major rising bull support. Needs to close above 2096 for the aggressive long entry, then it would need an immediate follow through to 2105 and sustain above it for the breakout.
The swing bear scenario is that this is a double top/lower high formation. Needs to close below daily 200SMA 2058 for the aggressive short entry, then it would need immediate follow through to 2040 and sustain below it for the breakdown.
We are going to continue using the same plan from the weekend update, wake up and review the overnight pattern then trade on a high probability morning setup. By employing a rangebound style along the swing high/lows and take quick profits. This should protect us from he false breakout traps like last Monday to Wednesday when we traded using a breakout style. In reality the market was just just fluctuating inside the blue channel, but we failed to realize that early last week.
