This past week rally brought the price to the monthly R1. It seems the bulls in a rush to establish the dominance from the get-go. From the price action perspective this is all logical. Ignore big numbers, as I mentioned in my previous post, the numbers have no meaning to the machines. Look at the chart from a perspective of the price action and patterns. Market is fractal. Thinking in numbers only makes things more difficult to process. The bias, that the market can't go higher, will kick in. The inflection levels acceptance/rejection is the only concern for the trader. Think like a machine.
There is no doubt the market is stretched to upside. If it starts stalling we may see a strong downside move. That move has a purpose: create a fear and force weak hands to sell, find new buyers who help to push the price even higher.
Looking at the last day of the previous week. An attempt to lift the price farther off the monthly R1 did not go well. At this point it is not enough information to say what happens next. The price is parked basically at the inflection level. The last day was special: NFP and options expiration may skewed the price action. I anticipate some resting and consolidation around monthly R1 before the next directional move. Fading edges of that consolidation would be profitable.
This past week had yet another gamma squeeze. The derivative market (options) drives the cash market. Calls buying forces the market maker to buy underlying stocks.
The options market expected range for the next week: 16015 - 16670. A good range for day trading.
Good luck!
11/06/2021
There is no doubt the market is stretched to upside. If it starts stalling we may see a strong downside move. That move has a purpose: create a fear and force weak hands to sell, find new buyers who help to push the price even higher.
Looking at the last day of the previous week. An attempt to lift the price farther off the monthly R1 did not go well. At this point it is not enough information to say what happens next. The price is parked basically at the inflection level. The last day was special: NFP and options expiration may skewed the price action. I anticipate some resting and consolidation around monthly R1 before the next directional move. Fading edges of that consolidation would be profitable.
This past week had yet another gamma squeeze. The derivative market (options) drives the cash market. Calls buying forces the market maker to buy underlying stocks.
The options market expected range for the next week: 16015 - 16670. A good range for day trading.
Good luck!
11/06/2021
