While observing the market yesterday, something stuck out to me. A certain 'tell', that occasionally shows itself in the intraday trade. Normally price levels are well-traversed in the back-and-forth chop of price discovery, so any price level that distinctly sticks out immediately draws the eye, and the attention. There is clearly something different about it, and it could end up being a critical price level of interest once it's confirmed through the market breaking it. Let's examine the below chart:
Notice how nicely the tick chart structure (which measures activity) supports this trade. First, the precise level of interest is marked on a very distinct pullback - no clutter on either side of it. Market makes a new low, bounces up to 81.50, and then gradually sinks back down to yet another new low. However, slowly, then surely the market lifts off with increasing speed, until we arrive at the level of interest again. Exactly selling off that level, the market bounces back, retests, and predictably cracks right through it.
Anytime I see this I get excited, because I know that a very high probability trade is waiting for me at that level, entering in the direction of the throughpush. This is a pattern the market does exhibit from time to time, usually in the vicinity of a recently rejected low and is indicative of a change in trend.
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