People are going to see different things depending on the time frame being observed. At S.C., we are focused on the potential of the big picture. Even in the face of a sell signal, this market is in a broad that I have been writing about for months. This would be the 8171 to 4983 area which is the .618 of the entire structure relative to the 150 lows.
signals in such an area are high risk, unless you are day trading and using small profit targets. Even then it is hard to justify the benefits considering the amount of attention and costs that go into such an activity.
If the 6850 minor breaks, this market can squeeze to the low 7Ks which is where the is located. This is a reasonable expectation for a short term move.
The question is, what happens at the trend line? If a lower high is established, this market can see another attempt at the 6K low. This scenario can present an attractive buying opportunity which we will be watching for.
If the breaks, the 7790 resistance (.382 of recent structure) is the next obstacle. When that level is taken out, the short term outlook will switch from to which changes how we determine stops, targets and expectations.
In summary, I often have to repeat that this is not about predictions. It is all about IF. At S.C., we let the market make the choices and based on that information we make adjustments or take no action at all. Since we focus on the bigger picture, and follow best practices, we prefer to bet on the long side, even when it is counter to the short term price action.
Market timing is an arena where in reality there are no rules. The only limitations we face are set by our capital and exchange regulations. There is nothing that says when the game begins, how it is played or when it concludes. In this space, you must define every aspect of the game, and that is what an investment or trading plan is all about. Without one, you will be part of what makes a market liquid, not a participator who capitalizes on liquidity. Just something to think about.
Weekly with link to full thread: