Good Morning Traders…!
The market took a much needed breather after a test below the previous days low off the opening price. Indexes rallied back to the 30 minute EMA, not traded to since the breakdown, and the Russell and Nazdaq made it back to the hourly EMA. If the SPs can trade back to the hourly EMA, there will be grail sells – setting up a retest of this week’s lows. Indexes closed on a pinball Sell – any trade above Tuesday’s high is a shorting opportunity. They may well put in a lower high too. The charts show a compelling bear flag forming on the Russell – small caps and the Nazdaq led the recent selloff.
The Dollar also broke down and the 2-period ROC made new momentum lows. Any iintraday reaction down in currencies can form a buying opportunity for a test back up.
Don’t forget the big crop report…..the chart of the beans has some levels marked off – a breakout from the width of a trading range can give a measured move projection to the upside. And of course a drop back into the range can lead to the middle of the range.
Crude had an upside breakout. Look for Z day consolidations – a further rally is a short for a scalp only and any morning dip is a buying opportunity. Of course Wednesday brings the crude numbers so this Z day play is pertinent only for the early AM session before any numbers come out.
The SPs have had a nice increase in volatility and have provided intraday opportunities in both directions.
Let’s hope this environment continues!
Good trading! Linda