Target 1274 (will adjust later)
Stop 1326
Logic for entering trade:
1) The market's quick snap back yesterday put a bullish hammer on the charts, but I am not too impressed by it. Bullish hammers are only meaningful when they show up at the bottom of a massive sell off and are accompanied by large volume. Yesterday's action doesn't match that criteria. 2) We have LH and LLs on the daily charts. This means the trend is still down.
3) ES broke the uptrend support line at 1310 yesterday, but it's now hugging it in after hours. When the market breaks a support line and then snaps back above it, but fails to clear it decisively, and then hugs it for a sometime, its a sign that support is about to break.
I have set target to 1274, but I don't really have a good idea for a good exit at the moment. There is no immediate support bellow 1310. The next big support is way bellow at 1240. I am attaching a long-term SPX chart to show how I calculate big support lines (SPX charts are better than ES at showing long-term trends). Next big support is near 1228-1240 levels, which is where the 61% fib, the previous major uptrend line and 200 day SMA intersect. But I don't expect a big wash off sell to that level. I am still expecting choppy action for a while. This is a good market for quick in and out trading, so I am keeping tight exit/stops.
No comments:
Post a Comment