Strange day on the markets today. Very strange. Perhaps because of it being earnings season with lots of announcements coming out today. I go away from the computer and come back and there’s been a 50 point move, come back again and it’s reversed, these conditions are awful for traders that are looking to set and forget.
The session began with a lower open, a quick recovery and then a retest of the early lows all within the first hour of trading. We then tested and threatened to take out yesterday’s high before reversing all of that gain, some 125 points, within an hour. It was brutal. Many scalpers will be out of the game on those moves, others will be loving life. I don’t consider myself a scalper so my more conservative and cautious approach has allowed me to ‘keep my powder dry’.
On the daily chart, we are bearish below 10832, and if we close below the open today to create a second bearish candle, I think it strengthens the bearish case. We did recently break above the long-standing trend line resistance so one thought I had is that this sell off may just be a retracement to test that level as support. That would be 10630 at the moment.
On the hourly chart, the 10700 is still attracting price and there are a cluster of candles oscillating around that level. So price could be a bit choppy here. Watch for a break below 10625 or a break above 10832.
On the m30 chart, the bearish divergence signal that came from the 25th took a good 12 hours or so to really move, so that’s good information to know, I can’t expect it to happen immediately. Price eventually broke lower to find the weekly pivot point.
The m5 chart is messy in terms of direction, but quite clean in terms of short-term moves. Price has been pretty well contained in the range I have marked out previously, so a range trading strategy would have done very well. I have marked out 4 opportunities.
1 – Bullish Engulfing candle at range support
2 – cluster of wicked candles at range resistance
3 – Gap opens lower, price doesn’t break range support, rejection trade long
4 – Rejection candle at range resistance
Today, watch out for the economic calendar, US durable goods and initial jobless claims will help fuel the rate hike speculation debate once more. Watch also for a break out.
In terms of Premium Signals, the algorithm is currently in limbo, right on the border line of Bullish/Bearish, so it’s not likely to generate too many signals whilst it’s trapped in the range. So the signals will be my manual trades.
Dax Support & Resistance
|200 Day EMA||10298|