A LONG SCENARIO We see the RED numbers. They show the Pendulum Swings.
Then we see the BLUE numbers, showing the minor Pivot Swings.
For both I apply the 0 - 5 rule. This means, if 5 is reached, a turn is highly potential. The problem here is, that you don't know then the 5 is over.
From the RED perspective, the market has not jet reached it's low. But from The BLUE swings, we can fairly expect a bounce, because we are at major support.
I expect support from the A/R lines and the red Centerline where price currently fluctuates around. The green sliding-parallel is just a measure of overshoot in the angle of the A/R's.
So, if price can fight it's way back above the red Centerline by a open and close, then this could be a good long signal.
You may ask, why it didn't worked the last time? If you are familiar with the Medianline rules, then you know, that after a breakthrough, we can expect a bounce back to it.
And that's exactly what happened. A bounce back to the Centerline.
A SHORT SCENARIO Counter to the long idea stands the short idea, which could play out when we close below the red Centerline again. That would be very ugly and we had to expect price landing down at the red L-MLH or at least at the white Centerline (see the left weekly chart).
However we play this, we have to play it with maximum controlled risk and follow our trade plan. Otherwise the market will rip off our face.
Trade save
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It's running and running and running....no matter how bad things are. In the end, it will sink again like a rock in the water.
Nice analysis ES, I'm watching around 3770 for a quick about face. The closes very important as you say. I have slightly different count ... no matter...as we are both looking at the same area. Hope to catchup soon..
Tr8dingN3rd
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@inflectionpointtrader, Hey Mr. R&B §8-) Thanks for sharing. Yeah, the 2's are suspect hehe... Look great, and I'm curious how big the bounce will be. Happy new week B.
Tom1trader
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Interesting. The volatility is good for my options trading but the bounce (as I expect) to new highs would return boring, less profitable but friendly conditions.Guess "they" would say with passing 20% down it is now a bear market. Will not hold my breath either way. A week can change everything. Agreed we want to keep out faces - my strategies place a premium on having all of the "what ifs" covered and capital preservation. Thanks and Keep smiling!
Thanks for your comment. I like Options too. But I see that prices are often not really fair, and I have a hard time to get filled at Mid Price (Interactive Brokers).
That's why I prefer the Futures. And because of the high volatility, I switched to the micros, which is absolutely enough for me to make some s.
Do you buy or sell the options in your strategies? I never got very lucky with selling them. They approached my strikes way too often and I chickened out. Would love to hear how you trade Options these days. On one hand, the high volatility should be great for selling Options (high premium). On the other hand, price can (and in my trades does) reaches the strike very quick.
Happy day Tom
Tom1trader
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@Forker, You are welcome and thanks for sharing your post. For TA look at support/resistance and trend lines. For indicators want volatility, volume and specific metrics. I literally never buy single long options as 1. wasting asset makes timing difficult 2. MUST be correct on direction -as if anyone knows 3. Very busy with music, gardening, life :-) Spreads let me set expectancy, risk & etc. and walk away. Strategies -CCS PCS Call and Put credit spreads -Flat and unbalanced in some way (usually BWB) Butterflies. The flies are a complicated subject. I use a flat fly (adjusts into an array) on SPY 5 wide that closes 7-30 days before expiration. I use 0 DTE ATM BWBs at the money broken wing butterflies on SPX at 1342P CT (78m to expire) with indicators to give a positive expectation. "These days" is the operative phrase; I spend much more time studying/ zeroing in edges than trading. Total positions in May 12 only one of which is open now to give you an idea. Have a great day and keep smiling!
Tr8dingN3rd
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@Tom1trader, Hi Tom, thanks very much for your feedback. Hope your flowers are happy and the vegy grows bold §8-) Man, that sounds interesting how you game the markets with your options. Specially the 0 DTE - need to check that out in my demo trading account. Happy new week, talk later.