The long term trend is currently under pressure as we have recently seen price beginning to make lower lows and lower highs. The H4 trend has been bearish and is gathering momentum.
Price is currently below the 50 period simple moving average on both the daily and 4h time frames which adds weight to the bearish argument.
We saw an excellent opportunity (in hindsight) on the H4 chart using a simple pitchfork. The median line has been tagged so the trade would have been perfect, for a few hundred points, so now we will look to a return to the upper median line, which stands around the 12406 price level.
Looking on the market profile chart, there is significant volume traded between 350-400. This may be considered a swap zone or flip zone and could now become the focal point as bears try to ‘defend their territory’ from buyers.
This zone is also the neckline area of a head and shoulders pattern. However, this pattern falls at the end of a downtrend. Despite this, due to the high volume traded there, we believe it has some credibility. Is that an H4 rising wedge/flag there? If so, it adds to the bearish argument if we are looking at a continuation.
In the Live Room this morning as well as the webinar this morning, we discussed the Low Volume Nodes and the zones that price would react to. The low volume nodes was zoomed this morning, during recording, it was beautiful. Price just zoomed straight through it. They can be great trading opportunities to add to your strategies and trading plans.
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We have broken above the two hour opening range on our way to the high of the day earlier, this suggests price action will be bullish today. Buying from VWAP and deviation low is a strategy. Look for bearish failures as chances to buy.
FOMC is coming up which will provide some potential volatility. A short opportunity comes from selling high and a break above the high of the day will be considered a high. There is another low volume node above as well. So I have been watching the 5-day composite POC which is around 420.