So I'm writing this at 23:00 EST before heading to bed. Wanted to check the market one last time to see if the 4-Hour ever closed below its trendline. It has not.
It currently is below it, but it has been below it 4 times now and failed to close below and pulled back every time. So, to remind, we look at a trending signal as a reversal before we consider it a continuation. Definitely interested to see what happens overnight.
As for yesterday, I expected a battle between the healthy looking 2-Hour Downtrend and what WAS the 4-Hour Uptrend line, but holy crap... they battled it out all day, with it finally pushing lower and signaling a 4-Hour downtrend.
There was a lot of volume both directions in that battle as well, as can be seen below. I would like to see a 2million volume day to show commitment to any direction though. Not that 1.7 million isn't good, but those 2 million trade days really stand out in price action.
With no Uptrend Support to repel the downtrend, my sentiment is bearish, as the direction is matching the longer trends of the Daily and Weekly. Either way, currently the trends are;
Uptrend - 6H, 12H
Downtrends - Everything else, with the Caveat that so far the 4-Hour has been showing as a reversal. You can see how healthy that 2-Hour Signal was though, it never let a single close above it's line.
If I wake up and this is still sideways like this, I may bounce trade, with caution, between the 4-Hour trend line and the 2-Hour trendline. That is a decent 20 point spread to work inside.
If the 4-Hour does close below 3813, then the next trend to look for is the 6-Hour to signal it is also in a downtrend. My math gauges that at around 3790ish, and remember it has to CLOSE below that level to provide a signal.
Note - As always, this is not official trading or financial advice. All liability for trading is on you. Always remember, the best part of your trading strategy is your risk management plan.
It currently is below it, but it has been below it 4 times now and failed to close below and pulled back every time. So, to remind, we look at a trending signal as a reversal before we consider it a continuation. Definitely interested to see what happens overnight.
As for yesterday, I expected a battle between the healthy looking 2-Hour Downtrend and what WAS the 4-Hour Uptrend line, but holy crap... they battled it out all day, with it finally pushing lower and signaling a 4-Hour downtrend.
There was a lot of volume both directions in that battle as well, as can be seen below. I would like to see a 2million volume day to show commitment to any direction though. Not that 1.7 million isn't good, but those 2 million trade days really stand out in price action.
With no Uptrend Support to repel the downtrend, my sentiment is bearish, as the direction is matching the longer trends of the Daily and Weekly. Either way, currently the trends are;
Uptrend - 6H, 12H
Downtrends - Everything else, with the Caveat that so far the 4-Hour has been showing as a reversal. You can see how healthy that 2-Hour Signal was though, it never let a single close above it's line.
If I wake up and this is still sideways like this, I may bounce trade, with caution, between the 4-Hour trend line and the 2-Hour trendline. That is a decent 20 point spread to work inside.
If the 4-Hour does close below 3813, then the next trend to look for is the 6-Hour to signal it is also in a downtrend. My math gauges that at around 3790ish, and remember it has to CLOSE below that level to provide a signal.
Note - As always, this is not official trading or financial advice. All liability for trading is on you. Always remember, the best part of your trading strategy is your risk management plan.
Comment:
Just thought I'd add in for those readying for the day, that Core PCE comes in at 08:30 EST today. I would expect some pretty significant volatility around that, as well as the jobless claim.
Any rebound would be (should be?) off a lower-than-expected PCE reading, and a higher-than-expected jobless reading. That would mean that inflation is beginning to come down and the labor market is beginning to loosen up, which would cause the Fed to look at a likely 50 bps hike in July. If the PCE comes in the same or higher than expected and jobless stays the same or is even lower, that would give the Fed reason to do a 75 bps, OR even a 100 bps. The market tends to worst case scenario everything, so I'd expect a 100 bps to get priced in (and therefore a plummet in the S&P).
Interestingly enough, we may see a mini boost if the data reads higher and unemployment lower, because if we were NOT worrying about inflation and a pending recession, those would actually be good things, and there are still some people living under a rock that may not realize that data to show the economy is growing and the labor market unwavering is actually a NEGATIVE thing at the moment.
Any rebound would be (should be?) off a lower-than-expected PCE reading, and a higher-than-expected jobless reading. That would mean that inflation is beginning to come down and the labor market is beginning to loosen up, which would cause the Fed to look at a likely 50 bps hike in July. If the PCE comes in the same or higher than expected and jobless stays the same or is even lower, that would give the Fed reason to do a 75 bps, OR even a 100 bps. The market tends to worst case scenario everything, so I'd expect a 100 bps to get priced in (and therefore a plummet in the S&P).
Interestingly enough, we may see a mini boost if the data reads higher and unemployment lower, because if we were NOT worrying about inflation and a pending recession, those would actually be good things, and there are still some people living under a rock that may not realize that data to show the economy is growing and the labor market unwavering is actually a NEGATIVE thing at the moment.
Comment:
It's official, 3770 is the downtrend signal of the 6-Hour. Look to see it close below that at 13:00 EST to confirm it is heading lower.
Next and final stop, the 12-Hour downtrend. My math puts that at around 3740-3750ish or below.
Next and final stop, the 12-Hour downtrend. My math puts that at around 3740-3750ish or below.
Comment:
Data in, a bit mixed.
People spending less money - Expected to be .4%, was .2%, so -.2% less than expected
PCE down ever so slightly than expected by Expected +4.8%, was +4.7%, so -.1% less than expected.
Jobless Claims ever so slightly higher than expected - Expected 228k, was 231k, so +3k less
Not sure it is enough to halt this downtrend, as the people spending less money, although it shows inflation may be peaking at least and thus less likely the Fed increases by 100 bps, and more likely they raise by .5 or .75, which are both already priced into the market. However, that means we STILL increased cost by 4.7%, and that is with people spending less... so overall, not great data, just not as awful as expected.
I'd expect we still head down to the 3600's before we make a run back up... but only the trends will confirm.
People spending less money - Expected to be .4%, was .2%, so -.2% less than expected
PCE down ever so slightly than expected by Expected +4.8%, was +4.7%, so -.1% less than expected.
Jobless Claims ever so slightly higher than expected - Expected 228k, was 231k, so +3k less
Not sure it is enough to halt this downtrend, as the people spending less money, although it shows inflation may be peaking at least and thus less likely the Fed increases by 100 bps, and more likely they raise by .5 or .75, which are both already priced into the market. However, that means we STILL increased cost by 4.7%, and that is with people spending less... so overall, not great data, just not as awful as expected.
I'd expect we still head down to the 3600's before we make a run back up... but only the trends will confirm.
The current bar, if it stays below about 3790ish, is signaling a 6 Hour Downtrend. That will leave but the 12 Hour Uptrend signal, a clear reversal, as the only Uptrend signal left. This leaves a very important point to make going forward, and one that is more difficult than you might assume.
How do you trade when ALL signals are pointing in the same direction?
I actually find this to be the MOST difficult trading atmosphere of all. This is because there is nothing to really look for to know when things will bounce. When this occurs, I have learned the most effective is to choose a target goal, and take profit when it hits. Afterwards, sit and wait to see if there are lower timeline Trends opposite, such as a 5m or 15m, and expect them to reverse and use them as entry points, then evaluate when they show trend following to the longer timeframes if you want to jump out and take profit or not.
Realize, that having Trend Trading for some time, I find the trends all at 30m and above going in the same direction to be unsustainable. The higher timeframes are always the more reliable, but that doesn't mean you want to watch profits get decimated by even a 30m reversing trend. I also look at Triangulation and apexes, as a key point when a major price fluctuation is coming. I still may make a video on these later, although they are my own personally developed strategy, so it may not be something that everyone wants to grasp onto. Likewise, while I find triangles to be amazing and predictors of major movement, I do NOT trade on them. I trade on trends.
Anyways... the 6 Hour bar ends at 7am EST, so as long as that is below 3790, look to that to be your downtrend line for 6 Hours. I'd also look at the 2-Hour trend as the healthiest trend look of all, and remember, healthy trends tend to last for about 40-50 bars. So roughly 80 to 100 hours of downtrend, which is about 4 days, and that started Tuesday at 13:00 EST. So that means that will last until Monday afternoon"ish".