Good Morning Traders! The light pace of volume set the tone for the day – no “higher time frame” players to drive price to a new level. Thus, despite a downside flush attempt, the SPs ended up trading on both sides of opening price multiple times. Only the Russell, which had had an upside breakout from a down trending channel, retraced back to the channel lines ( see chart above).
The market is poised to test up again, but likely will have the same problem getting too far unless there is a significant increase in volume the first 30 minutes. We are in the middle of the dog days of August and many markets, such as crude, metals currencies, have been “bracketing” markets – meaning trading range consolidation which leads to spikey tests in both directions but ending up nowhere. Crude was a classic example today. Do NOT get tripped up – this is a different type of trading environment – think scalp ONLY unless there is that increase in volume.
On the other hand, grains were good range off the crop report – test of these previous swing highs and lows, spike rejection, etc. has been the theme du jour for the past two weeks….Corn and beans closed with a Turtle sopu type of Buy 9 meaning false breakout to the downside – at least for now. Wheat has had several days high to low and has a nice BUY day setup for Wednesday.
Bonds – closed back below the previous 20 day high. Bunds, at 1.06% yield going out ten years….hard to see bunds having ANY more upside but I was thinking the same at 1.15% too. At any rate, like the SHORT side of tens bonds bunds but may or may not give anything quickly
OK! lets see if this Russel was a one day wonder flush only back to channel support lines….if so, those hourly charts can try up again!
Markets in BO Mode: