This is always easy to see after the fact, but sometimes difficult to see as it is happening. This is one of the reasons why I publish these charts - to help me visualize these patterns.
After 1300 ET, the market looked like it was going to form a downward correction pattern. We got a lower pivot low with the usual upside correction that was lower than the previous pivot high; however, the $TICK made a higher pivot high which was a caution flag for short sellers. Then the market made a higher pivot low rather than a lower one. This higher pivot low was validated by a higher pivot high. Soon after, the market broke to the upside vigorously.
Charles
It was such a tough call at 13:00ET. I was pretty confident the market was going to break one way or another, yet I couldn't find a good clue to which way it would go. I could see that we were forming a wedge (stuck on resistance, but higher lows and eventually it did break. My second problem once it broke was I was thinking it could correct and I had missed the opportunity. Eventually I managed to go long at 1097 for 3 points, but that was all. I tend to forget that the market can always go much higher/lower then I expect...
ReplyDeleteWhat a day though. I was in the edge of my seat waiting for that breakout.
I like to see that little correction after a break, but we don't always get it. I suspect a lot of people were on the wrong side of the market and had to liquidate. Many times that is what causes these straight line moves.
ReplyDeleteBlessed are those who took a long position before the break and held on to that position.
Charles