*Accuracy rating update: 100% or 16/16 predictions correct*
Day’s theme: Selling from near overbought territory on the RSI.
Behavior around the high: Bearish price swings with a notable drop that will stand out on a one-day chart.
Behavior around the low: A reversal that will stand out on at least a one-day chart.
Trade opportunities:
There’s an opportunity to open up a short position or protect against long positions around 11:00 a.m.
There’s an opportunity to open up a long position in the midst of a midday decline.
I’m advised to trade around a sideways rotation along a support level that increases with momentum and bullish sentiment as we move into the close.
I’m also advised to sell off at the end of the day.
Overview:
On August 18th, there’s a move higher in the pre-market. Multiple headwinds then send the S&P lower right around the open. There’s a breakdown through a support level to meet a secondary support level, and we bounce along that support level. There’s a trade opportunity highlighted around this time. Around 10:00 a.m., we have the beginning of a rally and a move to the upside. The rally increases with momentum as we move forward into the 11:00 a.m. hour. In the midst of that rally, there’s an opportunity to open up a short position or protect against long positions. There’s a big move to the downside into the early afternoon. There’s also an opportunity to open up a long position in the midst of that decline roughly around 1:00 p.m. or 2:00 p.m.
There’s a rally out of that decline that takes place between roughly 2:00 p.m. and 3:00 p.m. There’s a fast, sudden move higher marking the end of a period of decline. This is followed by a breakdown with increasing volatility as we break down through a diagonal trend line. Toward the end of the day, we break upward through horizontal resistance to meet a secondary resistance level which brings us to a day’s high. We then pull back to somewhere between those two resistance levels. There’s a big move off of a high toward the end of the day or in the post-market. In the post-market, there’s a merger or agreement of some kind highlighted.
Sneak preview:
A sharp decline through multiple support levels on the 19th.
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