Market Commentaries

Sometimes it is better to look at the big picture from afar to gain better perspective. Here is the weekly chart of Dow Jones Industrial Average.

FOMC Week Tendency

The blue arrows mark the week for which we have FOMC meetings and announcements.

Do you know that historically it is very likely within 2 meetings after each announcement that both the week high and week low are tagged?

The meeting back in March has its week high tagged, but not the week low (highlighted by red zone). It is now the potential downside target.

Basic Chart Patterns

Measured up move off 2015 year low (marked by the 2 red lines), weekly consolidation or pullback is due after the upside target was tagged.

Trend line breakout (the upper orange line) being tested from above at this April FOMC week. Failing to hold that we get trend line false breakout with previous year close (highlight by yellow zone) the next downside target.

STOPD Patterns

Dow tested previous quarter high and failed to hold above on weekly closing basis, going back down to previous year close (yellow zone) and previous quarter / year midpoint (middle blue line) is in play. How it gets there does not matter. What matters is that the dynamics will very likely nudge the market to complete the biases.

End Notes

There are more to understanding charts the right way. One important rule is that price levels from higher timeframes are more important than the lower timeframes. Another important rule is that STOPD levels from higher timeframes often dictate the moves in non-serial matter hence very difficult to notice until you keep track of them as part of your routine chart reading. Knowing where we stand in terms of weekly context can help us handle day-in day-out trading with much better clarity and confidence.

My premium members got the special update knowing a swing top is in within a day. That is based on custom market breadth models which can help us refine the timing and knowing the magnitude of the pullback. It is a very powerful tool but we still need solid chart reading skill to manage our trades properly.

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Overview

Emini overnight range 2040.75 up to 2060.25 (at 9:00 am)

Overnight Midpoint 2050.50

Previous Week Close 2058.75

Emini S&P is now trading at the bottom part of its range with a gap down.

Battleplan for the Day

(premium member only content below)

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Overview

Emini overnight range 2055.50 up to 2063.50 (at 7:15 am)

Overnight Midpoint 2059.50

Previous Week Mid 2070.00

Emini S&P is now trading at the top part of its range with a gap up.

Battleplan for the Day

(premium member only content below)

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