Trade Aptitude
Results of Wednesday’s Best S&P Turning Points: The suggested buy @ 3990.00 ran for 32.75 points and had a “natural” exit just before the FOMC Minutes were released.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Buy 3977.50 stop 3974.00. Short 4050.25 stop 4053.75.
The World Sentiment Index: (+100/-100) JUMPS from -43 to -7 in a world of mixed sentiment and low volatility.
Catalysts: GDP & Jobless Claims @ 8:30. Crude Oil Inventories @ 11:00. NVDA’s bullish forecast tips risk on.
Quick Tip: "Close Enough"
Looking at yesterday’s price action prior to the entry you’ll notice that price moved sharply down and “based” for a while in a tight trading range. This occurred just above our high-volume price level.
Sideways movement after a drop is called Accumulation in Market Structure lingo. Large traders are buying small quantities to fulfill a larger order. The orders are small enough to not create the subsequent uptrend. Once the larger orders are filled a final thrust of buying pushes price out of the trading range and the Markup phase begins. This is classic institutional demand.
Usually this occurs within the high-volume price level but not always. Watch for this pattern when you’re considering entering a high-volume price level. You may want to scale into the trade within the base and buy “with” the institutions.
Risk Management is your first consideration so make sure you limit your size to what you can ultimately afford if the base breaks down into the high-volume price level.
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Trade Fearlessly,
Mike Siewruk