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 rallied after building momentum and crossed above the intraday highs. Price action continued to consolidate above the intraday highs forming a triangle pattern and then broke the upper boundary and continued with strong momentum in a 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 prior day’s price action has been range bound with an upper boundary of resistance. Price action has continued the previous strong market cycle phase 2 from 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) (no reason to SHORT these markets).
Pre-market Economic news and reports Wednesday may have some impact on the momentum, so trade with caution since price action is at all-time highs.
Pre-market price action on the 5-minute charts is already above the prior day’s highs with strong momentum and higher highs and higher lows from the multiple flap patterns. With momentum retracing a little and 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. If you manage the trade carefully, there are more profits in it!
Review all of our trades in the Quick Hits For Fast Profits Summary table…
With price action providing strong weight-of-evidence and above the opening bell, above the 20 MA > 200MA, and we already had a buy signal from the ES 5 Minute Complete Strategy, we took a second LONG entry from the Market Cycle Strategies flag pattern setup. Took 2+ points profit.
With the 5-minute chart in a strong Market Cycle phase 2 with higher highs and higher lows, we took another LONG entry after the flag pattern retracement and retest setups. Took 2+ points profit.