The Daily Market Forecast... Reversals Become Breakouts

Friday’s Results: Buying 3898.50 stopped out.

Quick Tip: Reversals & Breakouts

The high-volume price levels formed by the accumulation and distribution of big lot traders are simply at “fair value.” Think about it this way: there was a buyer and seller for every contract traded. This means they AGREED the price was fair.

Once price strays OUT of the fair value level it becomes attractive to a trader who is either bullish or bearish. This allows you to trade both reversals and breakouts around the volume levels.

For example, looking at the price chart from Friday the highest volume price level from Thursday was 3895.50/3898.50. That buy failed immediately and the breakout was a monster continuation of the down trend.  

What about legacy high-volume levels? They work the same enough of the time for an edge. Note the temporary reversal at 3838.50.

Keep in mind as you follow the performance of the Blog levels every day they are both reversal and breakout setups.

Today’s Best S&P Turning Points:

Sell 4018.50 stop 4023.25.

Buy 3832.00 stop 3827.25.

Trade Fearlessly,

Mike Siewruk

P.S. What’s more important in trading? Math or emotions? Learn how to change your unwanted behavior here.