Our previous analysis identified the Intermediate Swing Short as a good candidate for a counter-trend trade. The market has spoken and more sellers than buyers have reacted to the price level. This is normal market behavior as the 1st target of the Intraday Aggressive Long has been reached.
As we have stated before, the 2nd target on all time-frames is the critical level as it is the Market target in contrast to the 1st target which is a profit target only. Many "weak hand" traders/investors will have very tight stops at these 1st target levels and will cover their positions at the fist sign of weakness, as happened in this case.
Price is now at the 1st Intraday Aggressive Long range and is being lightly bought. We have identified the 2nd Intraday Aggressive Long range along with the 1st target for both. Truly aggressive traders and investors who are long from the Intermediate Swing Long entry range will be adding to their Long positions at these levels. Aggressive daytraders will also be entering long at these same levels.
The Intraday Aggressive Short has already been sold, has approached its' 1st target and with any appreciable further pullback, will reach the 2nd target.
Now that the LT Short has failed and a new high is in place, what should we expect? A pullback and then a resumption of the LT Long trend. As we have noted in other published analysis when a new high or low is reached, there is no prior price action at those levels to analyze. In the case of an upside breakout, the shorts are in the most risky position long term.
Recent price action has not changed our view LT in regards to the chart and we will continue to be LT in trend and take ST counter-trend trades that meet our parameters.
These are by no means the only intraday trades that we have identified during this time period shown on the chart but they furnish a good representative sample of our analysis and its' accuracy.
See our other published charts for more examples and watch the identified levels as price approaches.
Trade the chart and trade safe.
Longs and shorts were both highly profitable. Chart drawings are not displaying correctly.