US equities began the week on a strong footing, holding firmly above August’s opening level at 25376 on the H4 timeframe. Sentiment, however, turned sour in US hours. Reclaiming 25376 to the downside, the H4 candles concluded Monday’s session down 0.51%. A few points beyond here, traders are likely honing in on H4 support at 24957, which happens to merge with a H4 AB=CD completion point (black arrows).
In terms of where the market stands on the bigger picture, weekly movement appears poised to retest trend line resistance-turned support (taken from the high 25807). A particularly interesting area to keep noted on this timeframe is the point at which two trend lines intersect (25807/23055 yellow) with the 2018 yearly opening at 24660. The support confluence here is mouthwatering. A closer look at price action on the daily timeframe points the spotlight towards a demand area coming in at 24897-25096 (closely intersects with a 61.8% Fib support at 25109).
Areas of consideration:
Keeping it simple this morning, the H4 support mentioned above at 24957 is a notable level to have in sight today for possible longs. Not only do we have H4 AB=CD convergence, the level is positioned within the upper limits of daily demand at 24897-25096.
Stop-loss placement, according to structure, is best placed under the current daily demand base (24897). For conservative traders, nevertheless, waiting for additional H4 candlestick confirmation to form off 24957 is an option (stop/entry levels typically decided from this structure).
Today’s data points: FOMC member Bostic speaks.
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