Short Nasdaq after 3 consecutive 5 minute red candle closes.The indices were unable to sustain a rally up until the last few minutes before close. I must confess, I got the shit beat out of me today, after 13 prfitable days in a row. I tried to go short, then long, then short and what a nightmarish day. As I reflect on the charts, I got sucked in all the way around. It was slated to be an up day, having been oversold after 7 days straight losses, then a strongly positive day yesterday. Even with Powell confirming the future of rate hikes for the time present, misguided investors were desparate to take it higher.
Overall, it was far from an impressive rally, as investors continually sold, and bulls were determined to take the market higher. Yet, the picture is one of the close being strong, giving the expectation of further buying.
Look for a short position on either a 15 minute candle close down, or better yet, 3x5 minute candles which will verify no strength somewhere in the middle of the 15 minute failure. This is for intraday traders, specifically. My expectation is that the market will not make it to the horizontal resistance level I've drawn, which will necessarily cause prices to break through the trend line. I don't put particular importance on the trendline to be respected. I trade only Nasdaq Futures, accept for a very rare oil trade. Thus, I am keying on NQ. Similar patterns should exist for s&P 500 and Dow with regard to bullish or bearish moves likely. If one index fails, the other won't likely be far behind, although Nasdaq buyers are a bit more determined to provde the market wrong about valuations. A more bull headish bunch, perhaps they are.
If looking for a long term play, without high leverage, I suggest waiting for tomorrows close. If it closes down, go short at market open the following day. If not, I've got nothing to suggest. I am not a financial advisor and wouldn't expect or want anyone to follow any suggestions, other than to study the charts, see the action as you see it unfold in real time, and make your own judgement call. I offer my writings for entertainment and to hear myself think out loud, for my own enjoyment. Nothing here should be considered financial advice or a suggestion to place a trade. The markets will pick up volatility as we get closer to the Fed rate meeting on September 20-21. Paper trading is safe. Putting money in a trade can be a losing proposition, as I saw today after a long winning streak and over confidence. Really, tomorrow is anybody's call. If Goldman Sach's or another big palyer decides to buy or sell, the market will likely go that way, whatever that may be.
We are in a bear market that I expect to last for potentially years. However, there will be strong rally's that can and do last days, and seem to just keep going for no good fundamental reason. Sometimes its wise not to take the first 15 minute dip, and wait to see if there is an additional recovery and another failure. Pick your risk and stick to it, with a stop if trading with high leverage, is in my opinion the way to keep control of your maximum antiicapated loss.
"Trade the market that exists, not the market you want"!
