I'll try to make my thoughts as clear as I can.
Friday ended in an inconclusive way for me. On one hand, we are still in a bear flag formation, and didn't close above the bottom of the small Blue channel - that seems bearish. On the other hand, we ended above the larger Red channel with no bearish divergence on the RSI - that seems bullish.
So what to do? Well, futures should give us an idea of what may happen Monday.
1. If we gap down below the large Red channel on Monday, I expect we'll test the Red channel from below. That would be a nice R/R for a short (with stop above the red channel) to 2240 area (bearflag target).
2. If we gap up above the bottom of the small Blue channel and then retest it, that would be a a good R/R for a long (with stop below the small Blue channel) as we probably would reach up to the 2560 area (upper blue trendline + .618 fib) on Monday or Tuesday. If we do get to 2560, I think that would be an ideal short (with a tight stop) for either - 1. The Red channel line (again) or 2. the Bear flag target of 2240.
3. There is also a third option - we just chop around here with no conclusion whatsoever for a day or two. I'll definitely be watching for that as well as I don't want to enter into choppy waters.
For now, I'll watch. Futures open tonight at 6:30 EST and I'll post some updates as things develop.
Good luck and enjoy your Sunday
Friday ended in an inconclusive way for me. On one hand, we are still in a bear flag formation, and didn't close above the bottom of the small Blue channel - that seems bearish. On the other hand, we ended above the larger Red channel with no bearish divergence on the RSI - that seems bullish.
So what to do? Well, futures should give us an idea of what may happen Monday.
1. If we gap down below the large Red channel on Monday, I expect we'll test the Red channel from below. That would be a nice R/R for a short (with stop above the red channel) to 2240 area (bearflag target).
2. If we gap up above the bottom of the small Blue channel and then retest it, that would be a a good R/R for a long (with stop below the small Blue channel) as we probably would reach up to the 2560 area (upper blue trendline + .618 fib) on Monday or Tuesday. If we do get to 2560, I think that would be an ideal short (with a tight stop) for either - 1. The Red channel line (again) or 2. the Bear flag target of 2240.
3. There is also a third option - we just chop around here with no conclusion whatsoever for a day or two. I'll definitely be watching for that as well as I don't want to enter into choppy waters.
For now, I'll watch. Futures open tonight at 6:30 EST and I'll post some updates as things develop.
Good luck and enjoy your Sunday
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Larger view
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Futures already above the lower blue channel trendline, expecting a retrace to test the channel, then more upside to 2560. Doesn't have to retest the blue line, but that's what I'm waiting for.
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2560 reached on futures, adding some shorts here
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price needs to stay below 2565 on futures, otherwise I will stop out and reevaluate tomorrow morning.
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stopped out of the trade, they are in this channel, waiting for it to break
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Will update idea soon for today
