Trade Aptitude
Results of Friday’s Best S&P Turning Points: The suggested buy @ 4134.50 didn’t trigger until the Globex opened on Sunday night running a modest 8.50-points. The breakout short from the level was the better trade, currently open with 21-points MFE.
Today’s Best S&P Turning Points (consider wider stops and less size in fast moving markets):
Buy 4081.00 stop 4076.00. Short 4146.00 stop 4151.75.
The World Sentiment Index: (+100/-100) DUMPS from -29 to -57 with most major world markets firmly Bearish. Historically the price has closed lower 73% of the time.
Catalysts: Nothing on the economic calendar. Friday’s employment report spooked the Bulls. Geo tension with China.
Quick Tip: Breakouts
The suggested Turning Points in this blog are derived from extreme volume at price. Think of those price ranges as “fair value.” Plenty of buyers and sellers willing to trade there. Once the level fails, either up or down, for the time being, big buyers or sellers are “gone.” This offers us breakout trades (see chart).
Depending on your style, you could enter the breakout as soon as price trades outside the level or wait for confirmation by entering on the retracement back to the level. Our research shows that the retracement entry performs better.
Another “edge” we’ve found with these levels is this: pass on reversals in strong trending days and enter the breakouts on a retracement.
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Trade Fearlessly,
Mike Siewruk
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