Direction
IF the bigger picture up-trend reasserts itself, we’ll get advance warning, probably here and now, if price is able to regain and hold the uppermost trading range. IF price is able to do that, it will encourage professionals who are quick to re-engage in a strong trend, much faster than most retail traders who tend to feel like the wind was knocked out of them when the first big down day shows up.
The bottom line – price has to hold generally above 10900; the next targets are 10945 and 10976 (the uppermost range high) if price holds up.
If not, then 10820 and 10670 remain the downside targets; at 10820 we’ll want to be open to the long side again IF a 2B or other test of bottom pattern sets up.
While price is hanging about the low-end of the uppermost range the best we can say is that the market has re-entered the pause zone and that the uptrend may reassert itself.
Futures
It may well be that yesterday’s clunk was it for this retracement – price pulled back below the 20 period moving average and hit our T1 target from yesterday dead on (10820 – the actual low yesterday turned out to be 10819, now it just doesn’t get better than that). Price moved in highly directional manner after the breakout below the range, leaving a decent trade opportunity to net near 70 points.
Today’s trade opportunity out of the gate is to stalk this retracement within the shorter term trend (a bounce in a down trend in small time frames) as it nears the uppermost range bottom and look for opportunities to sell short or buy long:
05.12.01 09:56 #