Market was very erratic today and obviously the sellers were strong. Last night I was looking at a few charts that mirror S&P emini and it seems that we are hitting a major Resistance point. Today's price action agreed with my analysis and I didn't take any trade as I wasn't sure of the market direction. I plan to stay on the sideline until market decides it's direction then I will likely get involved again. I find it a bit risky at the moment and you may have also noticed the chop in the market in the afternoon and around lunch.
There were a few short opportunities at time but I couldn't take advantage of them as I had work in the morning and only watched the afternoon when the market was very choppy with momentum all over the place.
Noticed the positive divergence as market made lower lows? The Chart Pattern Trader utilized that opportunity and made hefty gains on that move.. However, at the moment there are a couple of things going on here; Long-term MACD crossover, RSI positive divergence, stochastic moving away from the undersold territory and there is strong upward momentum.
The problem lies with the price-action. Two major Ma's are pushing market lower and there is a major resistance at the current price. It is likely that we may have either more choppy side-way days ahead of us or a rally into one direction that should trigger a new trend direction.
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