Direct from the desk of Dane Williams.
The last time we spoke about the S&P 500, the index was breaking out into fresh all time highs.
Since then, price action in the index hasn't been its normal vertical self, experiencing a nice little pullback and giving us a chance to day trade around one of our major daily zones.
Take a look at the updated daily chart below.
S&P 500 Daily:
The most important line for me is always the horizontal levels. One such that you can clearly see here drawn from that previous swing high formed when the rona first hit.
There really can't be any subjectivity on a horizontal line like this, especially when you draw them with a bit of leeway as zones.
There's no right or wrong here, but then traders are looking at different things, the self fulfilling prophecy that is technical analysis, certainly loses some of its bang.
So with this in mind, I'm only using the trend line here to display some sort of confluence of resistance. But trading decisions will always be made off horizontal lines in my analysis.
With price capped by daily resistance, we're only looking to day trade from the short side.
Now zoom into an hourly chart below and let's take a look at how the price action is playing out.
S&P 500 Hourly:
As always to find a short entry, we look for the first area of short term support underneath the higher time frame zone.
When that short term support zone is retested as resistance, we can use it to get short off and manage our risk around.
You can see that price just happened to hit our zone right as it also hit trend line resistance AND the bottom of our daily zone.
Quite a bit of confluence there and price was immediately rejected as a result.
Just keep marking your daily zones, setting your alerts as price approaches them and trading them the exact same way over and over.
Best of probabilities to you,
FOREX BROKR | LeoFinance Blog
Daily market analysis.
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