Overnight shortly past midnight, BOJ made their announcement and gold/silver began popping up.
The S&P tested support below 2130 – and came back up – but was still not ready to rally — not until after the Fed announcement.
And even with the Fed announcement, the rally was not so obviously in the first half hour or so. But as long as the 2130 support region, holds, we would go higher. We tested the 2132 region and 2135 region — before starting the move up. Even the first move to 2146 (prior resistance) – pushed the market back down to 2135.
Breaking over 2146/2147 was extremely critical for keeping the trade for the rest of the day.
At this point, resistance lies potentially above 2160. How it reacts there will be important in determining whether we are in the 3rd wave grind up – or whether there is more corrective b-wave action that would lead to a c-wave down.
We bought today when ES was around 2141. Previously, we attempted entries around 2135 earlier in the week, but the market didn’t break out ahead of the Fed meeting.
Instead, it simply went up and down. That’s why today, it was critical for the market to break 2147 in order to keep our buy entry, otherwise, we would have to exit once again.
But finally, the market broke over 2147.
At this point, we could hit our next resistance region and turn back down, or we grind higher. Resistance could be in the 2165-2170. Breaking over 2170 would be highly bullish if ti happens since that’s basically where this whole drop came from. But my guess is the market won’t be that straightforward so there should be some reaction back down above 2160.
I’ve been struggling in determining whether I should re-enter the GDX and silver trades for the auto-trade accts. There was a bit of angst with people not comfortable with me putting on those positions. So I decided I will instead provide analysis and make commentary here and there. For auto-trade I will try to stick to
If there weren’t a Fed meeting, I would definitely have entered back into GDX and silver on Monday and Tuesday – based on the pattern. But risk is higher with an event-based moved (which is what happened overnight with the BOJ announcement — GDX and Silver/Gold all shot up — and then shot up again with the Fed announcement.
So two events — made me cautious about entering this trade into customer accounts. I did so for myself. And while it would be nice to recover from the prior GDX/silver trades, I’ve settled with the fact that I will have to be right many times with the S&P. So sticking with the S&P – which is what I focused on for most of this year.
While our prediction in the below chart was eventually correct, the actual timing was off by a few days – basically until the Fed announcement came. We tried to enter to see whether the market would rally into the Fed meeting – as it has been statistically the case through history back to 1994 — but in this case, the market did not move.
After the Fed announcement, we entered back in, but closer to the 2140 region rather than the 2132/2135 region.
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