S&P Week of 9/27/2020 - Dead Cat Bounce or More Upside?

Here are my two trade setups for the week of 9/27. Last week I was able to successfully take my trade setup that I posted to the downside and it was very profitable.

At the end of last week's session, there was a strong surge up after price retested 3200 for a third time (confirming strong support). The big question is, is that indication that price is going to resume up or was that a dead cat bounce?

I keep my charts simple and leave the option open for both an upside trade and a downside trade.

Note that price has made a descending wedge pattern, which is generally bullish, and last week's hanging man candle on the weekly suggests we might have a reversal of the downtrend.

I would not act on any initial break out or break down. The best idea is after the breakout/breakdown, wait for price to retrace and then resume in the direction of the breakout/breakdown.

Even though the descending wedge is bullish, I am staying neutral until one of my trade setups occur. This may take 1-2 trading sessions to bring clarity, so wait and be patient for the high probability setup.

Good Luck!

Kommentera:

Price broke to the upside (trade 1 setup) and is testing support). Waiting for another 8 hour candle to make a higher high and it is a buying opportunity.

Kommentera:

8 hour candle is making a higher, so the market is signaling a buy entry. Note: I generally don't enter a trade until after the first hour of the NY session open because of the volatility. If the 8 hour candle continues to be green after 7:30 AM ET, I will be leaning into a long trade.

Handel aktiv:

Got into a long position with a stop loss below last breakdown (3200). I expect some retrace, up down, whiplash. For those wanting a safer entry. A break above 3375 with retest would also work.

Trade stängt: målet nått:

Hit my target at 3390 and exited my trade with a nice profit. Would have preferred to keep the position for multiple days or into next week, however, market melted up and I assumed a retrace to the last breakout area.

I don't like markets that melt up. Will see if another trade opportunity comes up.