Oh no!
An update already. Can't be good!
But I feel compelled to update here because the Monday trading session has revealed some new information. Overall analysis has not changed, really, but just some interesting observations that I wanted to point out.
As well, because we are now well on our way into this week's trading session, I can provide you with the real, live weekly targets that are adjusted based on current opening week price action. These are a little more rigorous than my prospective calculations so I tend to put more weight on these projections. Anyway, we will go over everything, but very briefly.
What's different from last assessment:
The market came in hot and heavy Monday. Like really hot and heavy. As planned, I entered into a short position on IWM to swing to the weekly bear target. However, the market just sold really quite aggressively in the morning and was extremely heavy, which was kind of unexpected.
In the words of the great Bailey Sarian, it was a lil suspish. So I ended up locking in my profits in the 163 range on IWM.
Why?
Well, if you remember in my last post, there were pretty convincing odds of both bullish and bearish momentum this week. I was expecting to see bullish momentum kick off the week and end on bearish momentum. The fact that we immediately went for all this bearish momentum ..... kind of odd.
Also, I didn't notice prior to posting my previous idea, but the 1 hour Z Score has given 2 buy signals. The Z Score indicator on the 1 hour time frame is actually extremely reliable at detecting bounces. It really does the job well. So this makes me think that upside is possible here.
Third, the chart itself is looking like it is mooning and it may want to break a bit higher, this was especially apparent on the ES! Futures chart.
Lastly, there are clear reversal patterns evident on the Heikin Ashi chart. I like to use Heikin Ashi to help determine trend reversals, both intra-day and on the larger time frames, it helps me gauge which math targets I should be focusing on. And Monday ended with a very clear reversal pattern on the 1 hour and 2 hour charts:
1 Hour Chart:
2 Hour Chart:
In fact, futures has already broken out from overhead resistance:
Verdict:
Don't get me wrong, this is still bearish. This, if anything, is more of a technical bounce (assuming we actually bounce tomorrow). However, this should provide a better opportunity to scale in short.
If you are playing long (I plan to), don't overstay your welcome.
If you are playing short, don't immediately jump in off open. Wait for this to play out and wait for confirmation first.
The biggest and, likely, most negative news is being released at the end of the week. I anticipate a whipsaw at this point based on the PA I am observing. Be prepared to get some whiplash and act quickly if you are swinging or day trading. It will require hyper-vigilance from both types of traders. If futures continues to bounce into the night, we may see this whipsaw happen sooner than later. But be prepared for some dramatic and volatile behavior, that we can be sure of.
Revised Targets:
So real time targets adjusted for current PA are as follows:
Bullish
1. 377
2. 379
3. 381
Bearish:
1. 358
2. 355
3. 352
I will add, we have hit the weekly bear targets (and not the bull targets) 2 weeks in a row. It is rare to hit them 3 weeks in a row without touching any of the bull targets. RARE but not impossible. But rare.
Trade safe! Be vigilant and let me know your questions/comments/critiques and thoughts below!
An update already. Can't be good!
But I feel compelled to update here because the Monday trading session has revealed some new information. Overall analysis has not changed, really, but just some interesting observations that I wanted to point out.
As well, because we are now well on our way into this week's trading session, I can provide you with the real, live weekly targets that are adjusted based on current opening week price action. These are a little more rigorous than my prospective calculations so I tend to put more weight on these projections. Anyway, we will go over everything, but very briefly.
What's different from last assessment:
The market came in hot and heavy Monday. Like really hot and heavy. As planned, I entered into a short position on IWM to swing to the weekly bear target. However, the market just sold really quite aggressively in the morning and was extremely heavy, which was kind of unexpected.
In the words of the great Bailey Sarian, it was a lil suspish. So I ended up locking in my profits in the 163 range on IWM.
Why?
Well, if you remember in my last post, there were pretty convincing odds of both bullish and bearish momentum this week. I was expecting to see bullish momentum kick off the week and end on bearish momentum. The fact that we immediately went for all this bearish momentum ..... kind of odd.
Also, I didn't notice prior to posting my previous idea, but the 1 hour Z Score has given 2 buy signals. The Z Score indicator on the 1 hour time frame is actually extremely reliable at detecting bounces. It really does the job well. So this makes me think that upside is possible here.
Third, the chart itself is looking like it is mooning and it may want to break a bit higher, this was especially apparent on the ES! Futures chart.
Lastly, there are clear reversal patterns evident on the Heikin Ashi chart. I like to use Heikin Ashi to help determine trend reversals, both intra-day and on the larger time frames, it helps me gauge which math targets I should be focusing on. And Monday ended with a very clear reversal pattern on the 1 hour and 2 hour charts:
1 Hour Chart:
2 Hour Chart:
In fact, futures has already broken out from overhead resistance:
Verdict:
Don't get me wrong, this is still bearish. This, if anything, is more of a technical bounce (assuming we actually bounce tomorrow). However, this should provide a better opportunity to scale in short.
If you are playing long (I plan to), don't overstay your welcome.
If you are playing short, don't immediately jump in off open. Wait for this to play out and wait for confirmation first.
The biggest and, likely, most negative news is being released at the end of the week. I anticipate a whipsaw at this point based on the PA I am observing. Be prepared to get some whiplash and act quickly if you are swinging or day trading. It will require hyper-vigilance from both types of traders. If futures continues to bounce into the night, we may see this whipsaw happen sooner than later. But be prepared for some dramatic and volatile behavior, that we can be sure of.
Revised Targets:
So real time targets adjusted for current PA are as follows:
Bullish
1. 377
2. 379
3. 381
Bearish:
1. 358
2. 355
3. 352
I will add, we have hit the weekly bear targets (and not the bull targets) 2 weeks in a row. It is rare to hit them 3 weeks in a row without touching any of the bull targets. RARE but not impossible. But rare.
Trade safe! Be vigilant and let me know your questions/comments/critiques and thoughts below!
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