These subtle changes should not be all that surprising. They are unfolding within the largest relative to this market since the sub 200 lows. The 8171 to 4983 (.618 area of entire structure) has been in play since the 6K low in February. As I have written in previous reports, a broader bottom is a process. IF price breaks the 7492 minor resistance (.382 of recent swing), that will provide confirmation that a broader move is in progress. A broader move higher from current levels can lead this market back to the low 8Ks at minimum over the next couple of weeks.
6897 is the high and serves as a long trigger for a swing trade, while the 6650 and 6500 levels serve as stops. The reward risk is still very favorable to the side because the minimum target is the 7492 level. So you are risking 300 to 400 points to potentially make around 600 at least. All this market needs is a catalyst or some typical tech drama to motivate a short squeeze.
Price action is leaning toward the side in a way that is not obvious to the crowd. This is what opportunities look like. As always, these signs can be negated by any surprise, but I think the potential is very limited. This market can still retest the 6204 and even 6K, so it is important to always be prepared for those scenarios. Speculating is not about precision, it is about constantly adjusting.
In summary, price action is coiling around a reversal zone boundary near a major low within a broader . You can't ask for a more attractive situation that isn't obvious to the market crowd. The appearance of the provides technical structure for a long trigger with well defined risk. If this market starts breaking near by resistance levels, it will be confirming a broad which can eventually lead back to 10K, it is just a matter of time and catalyst. The price action story is saying that the shorts are vulnerable in an area that still looks to the untrained eye. Learn to recognize the subtle signs, not the obvious ones and one way to accomplish that is to acknowledge what the market is NOT doing, rather than always focusing on what it is.
Questions and comments welcome. (See trade signal updates on S.C.).
The swing trade long with the 6900 trigger was activated yesterday. Even though the stop is at 6488, this market is not cooperating. As I write this the current candle has taken out the previous candle low which is a bearish sign. These markets change fast, I am still bullish on the big picture, but my goal is to control risk. This market can go as low at the 6380s before reversing again so if you are in the swing trade from 6900 you have to decide what is better for you. One way to reduce risk is to sell a smaller portion of your position for a loss, since the market is not cooperating, and then add it back if the bullish signs return. In this scenario, if price continues lower, you lose less. If it goes higher, you are still in a portion of the position, and you can always add to make up for the small loss taken. Trading and speculation has nothing to do with charts, and everything to do with risk management and adjusting to new information as it becomes available. A chart is simply one source of information that we can use to make adjustments. Any adjustment that we make will be posted on S.C.