Indexes have been tight and grinding for days. Premise for today is to see if volatility returns with today's news release. I am visualizing an expansion in volatility. Read is basic. If 1126.00 does not hold, look for move up and test of 1138.25 and potentially 1147.50. If price snaps back inside 1126.00 after news release, watch for sellers to step in and potential sell off through 1115.00 and down. If there is no large expansion, I would anticipate a smaller expansion by extending 1126.00 then coming back and extending 1115.00 then returning back inside range. Watch out for a contraction if price comes back inside range after news realease and volume is light at open. This prep is prior to news realease so premise may need to be adjusted based on what happens. Zones will not change. I will be looking to work off of breakouts of zones and extension failures today.
Brian, nice calls on the 1126 and 1138.25 levels today, pretty much called the high and low of the day. If you keep doing that your blog will have to become my start to the trading day ;-)
ReplyDeleteAnyway, I can see how you got 1138.25, the 1/21 high. But what structure did the 1126 come from ? I can only see 1125.25 as the 1/20 low.
Thanks,
Jos
Thanks. The 1126.00 zone has been on my preps since mid January. There is not really any difference to me between 1126.00 and 1125.25. One reason I have it at 1126.00 is that it was the breakout point of a downward move on 1/21. There are several other factors that go into my prep work also. I observed some unique price action there on 1/21 and also hit the short. My zones tend to work over and over again. Keep in mind that most of my zones are intended to be extended when tested. I rarely expect them to hold to the tick unless it is a role reversal like we saw today. 1126.00 was resistance now acting as support. A strong support or resistance zone to me is going to get washed out (stop runs). The true support or resistance point is often above/below the actual high/low of the range.
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