Trading action caused an inside day to form in the cash S&P500 on Friday. It also made the high of 11/14 a price fractal high and last Monday’s low a price pulse Change-In-trend and these developments are marked on today’s chart. The downward price pulse from the high of 1492.14 ended at 1443.49 last Thursday and, for now, constitutes a successful retest of the low set last Monday at 1438.53. Volume picked up on Friday, meaning that the move lower (the downward price pulse just completed) stopped on higher volume. Often times this type of price action comes at key reversal points (but not always). The way we break out of the small range day made on Friday will tell us volumes about the near-term direction of the market.
Since I continue to be in the camp that believes we are in the process of a successfully retesting the low, I will be going long the SPY (I still haven’t been filled) on any move above Friday’s high unless we get a new low first. My initial stop will be right beneath Monday’s low.
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