These Two Levels Offer Great Trading Opportunities
I have to say just when you think the market is going to slowly slip into
the abyss, it comes roaring back. I do not mean this as it relates to
longer-term direction of the market, just as it relates to intraday trading, HVT. Last Wednesday, Thursday and Friday were without a doubt some of the best
trading days we have seen in several weeks. Naturally, at first you are a bit
hesitant to “trust” the moves due to lack of follow through, but after a few
observations, you realize that there is in fact some range being put in.
Unfortunately, the morning session was still where I found the best
opportunities. The afternoon, while demonstrating decent range, still lacked
the fluidity that the morning offers. Â
The big question now really doe not boil down to the intraday analysis,
although that is important, but what the market is faced with in the
intermediate term. By doing this analysis, we can gain a solid understanding of
the levels which will likely provide the best intraday setups and as a result,
the most robust trades. Let’s take a look at the chart below:
Last week, the S&P futures completed a 5 wave decline from the December high
(X). This while modestly bullish in and of itself, becomes even more bullish
when you look at the weekly chart of the S&Ps:
So, with a key reversal week in place, the technical resistance above us is
what will determine if this is yet another false start to a leg higher or the
beginning of something more bullish. Time will tell, however, sentiment
readings refute this. Nonetheless, the retracement levels depicted above will
be key for trading this week. 823 and
851 will be levels that will likely offer
some great trading opportunities.
**At the time I wrote the first half of today’s article, it was prior to the
news coming out of the summit in The Azores. Naturally, this sheds a whole new
light on trading this week. It appears as though war is imminent. To draw any
definitive conclusions at this point is not necessary or even required. Trading
should be pretty volatile as rumors and emotions dictate price action. This is
an ideal environment for HVT (sad that a situation like this has to be the
driver). The best course of action is to stick with your game plan, buying
pullbacks, shorting rallies in down-trends, etc. Trade with conviction, moves
will likely feed on themselves in either direction, and hesitating will only
frustrate you.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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* indicates a level that is more significant
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