Good morning traders!
We have observed significant swing movements that align with our trading thesis, and it is essential to cover these developments. Additionally, I propose the inclusion of copper and silver in our trading plan, and I welcome your feedback on whether you believe these additions should be maintained. By incorporating these commodities into our analysis, this can provide readers with more diverse examples and opportunities.
Moreover, I am pleased to introduce a scanner that will identify stocks that have experienced upward or downward movements throughout the week. Specifically, we will focus on large-cap companies, highlighting the week's winners and losers. This addition will allow us to explore additional avenues of volatility beyond the stocks included in our daily plan.
I would like to draw your attention to the reduced emphasis we have placed on data analysis in recent months. At this stage, we have found that data releases have had less impact on the market, and therefore, our focus has shifted accordingly. Unless we encounter a data print that deviates significantly from expectations, we anticipate that the market will continue following its existing trend.
As you can observe, both indices have once again found support at their respective lows, leading them back to the Point of Control (POC) located within the key value area near the highs. This development is of paramount importance, as it is crucial to remain within this value area to sustain upward momentum. This principle also applies to microstructure analysis. For instance, on a trend day, it is desirable for the upper value to hold, followed by a breakout to new highs and the subsequent formation of a higher value area. This pattern repeats until the upper value area is breached and remains above the current price. The same concept applies to downward movements, where we monitor the break of value on the downside, leading to the formation of new lower value areas.
Emini - ES
We have witnessed a strong recovery as the market reclaimed the Point of Control (POC), as mentioned earlier, and swiftly returned to the main value area. Currently, I am eyeing potential long positions within this node, particularly near the Value Area Low (VAL). However, given the prolonged consolidation within this area, I may adjust my long entry level closer to the POC. Unless there is a significant shift, I do not anticipate the price revisiting the 4380 level unless the market breaches the recent lows.
Looking at today's trading session, it is crucial for the price to remain above the 4400 level to validate a bullish bias and increase the likelihood of a breakout towards the 4440s. However, should the price break below 4400, a revisit to the previous day's lows around the 4380s becomes a plausible scenario.