Hope all of you fellow traders had a great holiday and New Year!
Some traders have started out the new year doing well with profits and some not so well. It seems the vibe amongst retail traders is "now what" ? after being shocked by the power of the market steam rolling in one direction only. Yes, no pause and no pullback just straight ahead UP.
Ok, let's take a step back and digest what just happened. Let's look at a 15 and 30min chart of SPX that has ma's floating in it, you could see the 10,20,30,50,100ma's where fanning out from being bunched up which usually indicates a breakout and trend for that TF. Ok, like a robot you close shorts if you had them and flip to longs based on the fanning ma's and after the 20ma crossed over the 50ma. K.I.S.S. Not the band. You could see price respect the 10ma all the way up all day long. Sign of a strong trend. You as a trader (Ride The Wave).
Zooming out to a daily chart we have a possible H&S pattern forming. Is that bearish? NO! 1) the pattern is not complete 2) even if it is the only way it's bearish is if the neckline gets broken and price never bounces back up through the neckline. After a H&S pattern is formed price could break out above the head rendering the pattern bullish not bearish. As of yet this is not the case on the daily so caution is advised as we have some bullish bias because we can't ignore the new trend but the danger exists of a bearish pattern in the works. Another words (RISK ON)! People. 1 or 2% risk on total capital in this trade whether your a bull or bear.
Either stay on the sidelines which is still taking a position by the way or sleep with one eye open as these next few days play out.
I myself am long until I see price causing the 20ma to roll under the 50ma in a 1 and 2hr chart or we form a H&S on the daily and price breaks neckline, which ever occurs first.
Here are some target numbers for either way we go in the SPX.
Bullish 4876
Bearish 4594.4
4542 area marks a top of a bearish sloping trendline which the market may choose to test if we break the structure.
More on this as she plays out, in the meantime trade with caution and realize we are in noman's land until the market proves it's trend, so keep an open mind with open eyes.
Some traders have started out the new year doing well with profits and some not so well. It seems the vibe amongst retail traders is "now what" ? after being shocked by the power of the market steam rolling in one direction only. Yes, no pause and no pullback just straight ahead UP.
Ok, let's take a step back and digest what just happened. Let's look at a 15 and 30min chart of SPX that has ma's floating in it, you could see the 10,20,30,50,100ma's where fanning out from being bunched up which usually indicates a breakout and trend for that TF. Ok, like a robot you close shorts if you had them and flip to longs based on the fanning ma's and after the 20ma crossed over the 50ma. K.I.S.S. Not the band. You could see price respect the 10ma all the way up all day long. Sign of a strong trend. You as a trader (Ride The Wave).
Zooming out to a daily chart we have a possible H&S pattern forming. Is that bearish? NO! 1) the pattern is not complete 2) even if it is the only way it's bearish is if the neckline gets broken and price never bounces back up through the neckline. After a H&S pattern is formed price could break out above the head rendering the pattern bullish not bearish. As of yet this is not the case on the daily so caution is advised as we have some bullish bias because we can't ignore the new trend but the danger exists of a bearish pattern in the works. Another words (RISK ON)! People. 1 or 2% risk on total capital in this trade whether your a bull or bear.
Either stay on the sidelines which is still taking a position by the way or sleep with one eye open as these next few days play out.
I myself am long until I see price causing the 20ma to roll under the 50ma in a 1 and 2hr chart or we form a H&S on the daily and price breaks neckline, which ever occurs first.
Here are some target numbers for either way we go in the SPX.
Bullish 4876
Bearish 4594.4
4542 area marks a top of a bearish sloping trendline which the market may choose to test if we break the structure.
More on this as she plays out, in the meantime trade with caution and realize we are in noman's land until the market proves it's trend, so keep an open mind with open eyes.