US markets have pushed upwards, breaking the 3-day highs and probably moving as high as the February 50% levels this week ( expected resistance until March)When the market moves above the 3-day highs, there is an expectation of a 2-day 'stall-reversal' until the 3-day lows catch up with price. Those 3-day lows are all the way down to the bottom of last week's lows.
I've drawn two purple bars on the DOW daily chart, because I expect a 2-day 'stall', that can stall and consolidate around the highs using the 5-day 50% level as rotation points, or it can come down much further this week over 2-day's (back to the Weekly 50% level as first reference)
We can see both US markets have stalled at the Weekly .618 range and closed below, those upper levels are important RISK levels for Tuesday's trading.
I'm going to limit today's trading set-up to the DOW mini.Monday close above Monday's dynamic highs, therefore my expectation is that price will push upwards into 12625-53 before reversing back down into support.
Support zone is more a reference zone for any down move on Tuesday and exit.
Support can be also use the trade longs, but it's a much higher risk because of price moving into a 2-day stall-reversal pattern.
Yesterday:- price action moved up into the highs from Thursday (expected resistance) and then came down and retested support level @ 12399 before moving higher into the close.
Therefore 12451 should be used as a reference for any exits.....
Posts
