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As some good observers noted today in the Stocks & Indices chat we now have a distinct lower high on 60 min and our tactics have to be in awareness of the fact. We can employ both long and short strategy but we have to be in line with the expansion range. Also note the high density of the large order deltas: this zone can seriously impact support and resistance...
The probabilities of remaining in the current weekly range are increasing as we approach the Friday Opex. Capturing a realistic portion of the Thursday range will be easier if we pin point this week's POC in terms of volume and the recent average daily ranges. We'll keep in mind that this week we witnessed the 1st 1%+ gap down for SPY since August, which should be...
Broadening formations occur when a market is experiencing heightened disagreement among traders over the appropriate price of a security over a short period of time. Buyers become increasingly willing to buy at higher prices, while sellers find ever more motivation to take profits. Taking into account the developing weekly range we're facing high probabilities of...
DAX is at the mean of long term and short term 2 standard deviations channels. Notice that the long term mean is acting as resistance this week. A point of reference for risk management and target setting.
This is what I'll be watching for the next 24 hours and probably beyond. Today's session was an easy play. Tuesday will be more challenging as fear and greed are getting off balance and things will get more chaotic.
1) Since year 2000, 58% of 10,305 chart patterns with upward breakouts had throwbacks.
2) A high volume (above 30-day average) breakout throws back 70% of the time.
3) After returning to the breakout price, 35% continue dropping below the chart pattern. That mean 65% of the time price recovers.
This is an example of applying the current 10-day average range (approximately 20 points) to the market posture. Note the significance of the Friday close level (support turning into potential resistance zone).