This commentary will focus on the first 60-90 minutes after the Opening Bell. However, our strategies can and will provide setups the entire trading day.
Overnight price action consolidated above Friday’s intraday high with a 2X top and upper boundary of resistance. Friday’s price action during market hours provided a great example of market cycle phase 2 with higher highs and higher lows based on flag patterns and swing pivots.
From a birds-eye view, the last few days price action has been range bound with an upper boundary of resistance and prior to this, price action has been in a strong market cycle phase 2 the majority of February 2017 with higher highs and higher lows for an extended period over multiple days and continues to present several LONG setups (i.e. Flag patterns) over the last several days (no reason to SHORT these markets the last few days).
Pre-market Economic news and reports will be minor until Tuesday and Wednesday where a substanial number of reports will be released.
Pre-market price action on the 5-minute charts is range-bound with minor upper resistance from overnight price action finding resistance from a 3X top area. With momentum showing weakness and a small flag pattern forming heading into the opening bell, we will be cautious heading into the beginning of the trading week.
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We took an aggressive LONG entry and with slow momentum moving in our favor, we tighten our stops and took 2+ points profit.
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