We’re very weak overnight as sellers entered the market aggressively around the European open. The selling action has taken price over 15 handles off the close yesterday.
The compressed profile yesterday was located entirely within Friday’s value and stalled in the afternoon. This type of acceptance of Friday’s value gave the suggestion that we would at the least retest the low end of Friday’s value. Price cascaded through Friday’s value area low after it initially held as support overnight.
If the bulls can manage to retest the 1634-1636 range today, that would be an impressive recovery. However, the more likely scenario is an auction of the otherwise neglected price levels ranging from 1632 – 1614.
If you’re positioned aggressively long (like me) and have some cash remaining, your best bet here is to be patient before adding long exposure. Wait to see if the market will test back down to 1615 area.
I’ve noted this range and other important areas of support/resistance below:
Too many people are looking out for this Inverted Head and Shoulder, me too by the way, but aksing myself if this is too obvious right now…still biased long but have the strange feeling a strong sell-off in the coming sessions would hit many people hard including me…
I think your eyes are quite astute and perhaps early to spot to potential inverted HnS structure.
But yes, us dip buyers may need to be corrected.
Define and accept your risk, but you know that.