Today the bulls completed the action by hitting the first projected target - December’s point of control. It also had a confluence with a launching point of the downside move. Whether we see a deeper pullback remains to be seen. It was not an easy market to trade today. The bulls pushed higher from the RTH opening without giving a chance to get in. In such cases it is better to let the momentum die and see what happens at the resistance level. When it seems that the price never stops it is hard to put a contra trade and fade the move even at the inflection point. You either take a leap of faith or wait for a confirmation. My first trade was to short at the resistance 6928. The second trade was to buy at the support, previous day high. However, I didn’t anticipate a complete reverse and retest of today’s high so the target for the long was 7010.
The bulls are clearly on a mission to squeeze all the shorts. But I think that the short term upside target is archived and the market will consolidate within that big congestion area. I anticipate that both long and short trades would work.
The risk reward for the upside is diminishing though. The volume is low too. It suggests that we don’t see a big institutional participation at these higher prices. That usually leads to a deeper pullback to attract new money. We shall see...
02/05/2019
The bulls are clearly on a mission to squeeze all the shorts. But I think that the short term upside target is archived and the market will consolidate within that big congestion area. I anticipate that both long and short trades would work.
The risk reward for the upside is diminishing though. The volume is low too. It suggests that we don’t see a big institutional participation at these higher prices. That usually leads to a deeper pullback to attract new money. We shall see...
02/05/2019
Note
Not much has changed. An inside day. The market is consolidating which is in line with the main analysis. Both longs and shorts trades worked during the RTH session. The session started from a failed breakout above yesterday’s high. That encouraged the sellers that were eager to push the price lower. However, the buyers quickly regained their dominance at the previous day low and almost reversed the entire move. After that the price moved within a relatively narrow range. 02/06/2019
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.