As markets approach previous highs or lows, special attention should be paid to how the market reacts to these points. Yesterday, the ES market approached a previous high pivot around 1350 ET. This is a good time to start evaluating continuing strength or possible reversal.
Using the 15 Stock Sector 6.5 Hour Stochastic, we can evaluate the market's strength based on the last day of open pit trading. As the ES Futures was making a new high, the equity market based on this indicator was not making new highs. This is a possible sign of a reversal.
Around 1450 ET, the ES Futures started to make lower pivot lows based on market structure analysis. As it turned out, this was a good place to short. Remember that you do not have to and should not try to predict the highest high or lowest low of a move. Wait for market structure and momentum indications to confirm reversals.
In addition, the $TICK and the Moving Average of the $TICK pivot ((H+L+C)/3) started to make lower lows at around 1430 ET to signal a possible reversal.
Charles
No comments:
Post a Comment