Despite the end of day ramp on Friday, daily chart has more signals of weakness:
- Heikin-Ashi candle shows a big fight between bulls and bears ... or between smart bulls and dumb bulls :-), as candle had both upper and lower wicks. Finally the candle has made a lower low and it has bearish body.
- Kijun was saved on Friday (HA candle still closed above 26 days avg), but Tenkan is turning down and a possible weak bearish Tenkan/Kijun cross is close. This could extend pull back.
- both haDelta and haOscillator show weakness
- EWO has been building strong bearish divergence, and it is improving
You don't have to switch to lower (4 hours) time frame to see the quite obvious supports, where the perma dip buyers will always try to buy.
1. First one is 2159, which was saved on Friday. Given the fact 4H setup is already bearish, I think this level could be easily broken next week.
2. Next key is around 100wma at 2130 +/-. There we will see some reactive buying (short covering again)
3. Should the pull back continue deeper, the thick Kumo cloud and the uptrend line provides quite a strong support zone between 2092-2114.
I believe we can reach 2110 +/- area, which is not bad, but we have to keep in mind that shorting this market is a counter trend trade. Looking at expected risk/reward and odds, my money management system doesn't allow to do more than 1 unit position size, but the good news is that ATR (volatility) is still so low, that 1 unit means 4 times more futures contracts now than back in June-July, when ATR was extremely high. :-)
For the record, I am already in position and have 1 unit short. If I were flat, I'd try to catch spikes, instead of doing impulsive sells at/below suports. The reason is the lower you sell, the more likely you face stronger dip buyers, while your risk/reward ratio also deteriorates as your initial stop has to be around 2192, against possible target around 2110 +/-.
Note: I dod not attach weekly chart this time, but there we also have a high probability local top signal by Heikin-Ashi
- Heikin-Ashi candle shows a big fight between bulls and bears ... or between smart bulls and dumb bulls :-), as candle had both upper and lower wicks. Finally the candle has made a lower low and it has bearish body.
- Kijun was saved on Friday (HA candle still closed above 26 days avg), but Tenkan is turning down and a possible weak bearish Tenkan/Kijun cross is close. This could extend pull back.
- both haDelta and haOscillator show weakness
- EWO has been building strong bearish divergence, and it is improving
You don't have to switch to lower (4 hours) time frame to see the quite obvious supports, where the perma dip buyers will always try to buy.
1. First one is 2159, which was saved on Friday. Given the fact 4H setup is already bearish, I think this level could be easily broken next week.
2. Next key is around 100wma at 2130 +/-. There we will see some reactive buying (short covering again)
3. Should the pull back continue deeper, the thick Kumo cloud and the uptrend line provides quite a strong support zone between 2092-2114.
I believe we can reach 2110 +/- area, which is not bad, but we have to keep in mind that shorting this market is a counter trend trade. Looking at expected risk/reward and odds, my money management system doesn't allow to do more than 1 unit position size, but the good news is that ATR (volatility) is still so low, that 1 unit means 4 times more futures contracts now than back in June-July, when ATR was extremely high. :-)
For the record, I am already in position and have 1 unit short. If I were flat, I'd try to catch spikes, instead of doing impulsive sells at/below suports. The reason is the lower you sell, the more likely you face stronger dip buyers, while your risk/reward ratio also deteriorates as your initial stop has to be around 2192, against possible target around 2110 +/-.
Note: I dod not attach weekly chart this time, but there we also have a high probability local top signal by Heikin-Ashi
