Day’s Theme: A crest that we’ll sell off down to and through support. We’ll then do a U-shaped reversal below that support and then come back up to reuse that support level as support.
Behavior Around the High: A move higher through resistance that we’ll stay above briefly and then break back down through that same price level.
Behavior Around the Low: An important price level on a multi-day scale is highlighted around the low. There’s also some chart behavior that nullifies the low and somehow makes it irrelevant, so we’ll have a U-shaped reversal off of the low.
Trade Opportunities:
I’m advised to trade around a rally along a diagonal trend line that ends with a fast, sudden move higher. We’ll then break down through that diagonal trend line with increasing volatility on the way down.
An opportunity to open a short position in the midst of a rally around the open.
Overview
On May 3rd, in the pre-market there’s a move higher from the bottom of a range to the top of a range out of a decline. That’s followed by a full retracement of that move. We’ll bump along resistance around the open. We’ll have some bullish behavior and a bit of a rally in the first 5-10 minutes of trading. That rally will create a day’s high and offer an opportunity to open a short position for a day trade. That rally’s followed by a decline. Into the 11:00 a.m. hour, we’ll move to the upside and establish support.
There’s a lot of price movement midday and a big move to the downside. Out of that decline, there’s another unexpected rally to the upside. I’m advised not to chase that rally or react based on how you’re tempted to. There’s a reversal off of a low around 3:00 p.m. If a short position was opened earlier, I’m advised to close it here.
Sneak Preview
On the 4th, there’s a rally along a diagonal trend line that breaks through horizontal resistance to meet a secondary resistance before falling back to somewhere between those two price levels.
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