Hey, traders. We are in the middle of a market correction. The market's standing in the range. SPY has the upper level of the channel limited by resistance lines at 313.1, the lower level of the channel is 298.8 If we will break the lower level, we will get a possible fall in the area of 280. It is hard to say whether the market will be supported or not. I would not bet on buying any time soon. The market is under pressure from several factors: the virus, Biden's leadership and industry issues for banks and social media companies. The Dow Jones Industrial Average (-2.8%), Nasdaq Composite (-2.6%) and Russell 2000 (-2.4%) also fell by more than 2.0%. All 11 sectors of the S&P 500 closed in the negative zone.
The banks were pressured by the Fed's decision to require them to suspend the share buyback and dividend caps in the third quarter. Also from the negative news is the reluctance of many companies to place their advertising on the FB. Naturally, the company's shares were marked by decline. This week, we will look at reports on consumer confidence and the number of jobs. I expect a storm from the volotilities, especially since this working week in the US will be short.
So, in the end, the summary for the beginning of the week: I expect the market to fall. I'm very cautious about longs. I will give priority to short signals. When trading inside the day, we pay special attention to the SPY behavior.
Now lets see the Visa. This is first candidate to short. What we see on the chart:
1. A strong mirror level, formed back in December 2019. 2. The resistance level has become a support level. 3. From May 18th to June 9th, we were going up, however we could not consolidate above 200. The strong short player dropped the price to the support level. 4. On the 11th, 12th, 13th and 25th the shorts player tried to break through this level. 5. We are watching a series of retests. 6. The last trading session was closed under the low 7. You can see that the short player has gained position. I expect a break-down level.
I recommend to enter the short strictly according to your trading strategy.
Great short ! I didn't trade today but I think the paper is falling to 185.75 soon :)
Alexey_Malorodov
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@battousai1130, yes! it was good short) I got 1.3$ profit on share)!
battousai1130
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@Alexey_Malorodov, I am curious. How did you choose to take profits at 1.3 dollar/share ? ATR is around $3 and there is also a gap at 185.75. I would have fixed at as my target at 185.75 with 189.75 as SL. My target will not be met since aggressive buyers stepped in at 187.5 . Do you close your short based on order flow ?
Alexey_Malorodov
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@battousai1130, Entry point 188.75 - exit point 187.47 = 1.28$. my level was on a chart 188.75. Exit model was at the turnaround bars.The decision to exit is made based on the nature of sales and purchases. Also, the sales volumes have faded.
Alexey_Malorodov
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@battousai1130, By the way, I've written before that I use very small SLs, in my telegram channel I showed several live videos of my deals with the size of SL of 2 cents. I trade pulses, with such a short stop order on the pulse you can take a very good profit. You have a large amount of risk, so you would not get a profit target. I have a different strategy.