Since the last Instablog; the stock markets went into multiple whipsaws for many traders with this chart as the guide as of June 20:
Today, another Ray of Hope is at hand for aggressive traders:
The 1333 to 1335 area could be considered as viable confluence of supports for those who are trying to find high-probability entry level while SnP500 is still trading near the 50% Fibonacci Level of the 1266.74 to 1422.38 Trading Range. It consist of the up-trendline; the 50ma; the 61.8% Fibo Retrace of the last run up; the horizontoal blue line that practically touches 3 price points from left to right - left not shown; and the 38.2% Fibo Retrace of the whole run up from the 1266.74 bottom (last one not shown to reduce clutter).
On the Intraday Chart (for the Bulls):
I bought ES and YM today using the potential Divergence Buy Signal (before it triggered) and the 127.2% to 138.2% Fibor Extension Reversal Levels (while SnP500 was testing those levels).
For those who wanted to chase a potential rally. There are several Trading Strategies that can be employed after the initial bounce:
1. Wait for a Potential Inverted Head and Shoulders to form with 1336.27 as possible Right Shoulder Support;
2. Use a breakout above the potential Neckline Resistance of 1345 as an entry;
3. Use a breakout above the Violet Down-Trendline Resistance as entry - ONLY IF Spx is able to make the breakout in less than half the time it took the A-B-C patttern to form from today's bottom;
4. Wait for a 1-2-3-4-5 rally to happen on the 5min chart then wait again for a slow-grinding A-B-C down to buy for those with patience to monitor intraday charts. Don't buy if Spx goes down very fast after forming a 1-2-3-4-5 run up on 5min chart. As of now, the pattern is a potential 1-2-3 with 4 and 5 to follow. But reduce expectations since over-night price actions of Futures can easily distort the pattern at the CASH open tomorrow; or
5. Buy above today's high tomorrow if a breakout happens - for those who prefer to use the daily chart.
A breakdown below today's low is naturally the SOP Hard Stop Loss since a Spiral Meltdown could start forming if that happens. Use Trailing Stops if a rally actually happens since SnP500 is still in a very whipsaw territory. Hold on tight to your positions if SnP500 is able to break hard above the 1370 Major Resistance. Next Major Resistance is 1451 on a break above 1422.