Before getting into trades, note the channel this time. We get two clear bottoms established early on, and can use these to create the channel on the top mid-point between them, for a target later this day.
Yellow circle: THe market opens downward, and makes a bearish gravestone off the 34 which is optional. We get another bearish hanging man near the 34 shortly after, and again it tanks to new lows. But neither are sig-candles or 7J, so both are optional. After a recovery to the midpoint of the 2 lows as mentioned before, we still get no trades. This run up is a 5m pullup, and we get a bearish drop after into a 1m pullup, for our first setup at about 7:30. This reversal off the 1m creates over 100 points on the short.
Orange circle: After recovering halfway, the 5m begins to fall off again. Note it doesn’t get to the channel top yet. In addition, there is no sig-candle at the top when this move falls off. But 1m makes a great pullup, and bearish gravestone non-sig 7J, which we can short for another 100 points. We should also take into account that since it did not reach the top yet, we shouldn’t expect a massive move here.
Blue circle: 1m comes off the 34 multiple times, and fails to make a low, until finally making a bearish harami extending through all EMAs, and STILL doesn’t fall through lows successfully. The bottom becomes a bullish harami, and despite several non-sig bearish signals after, it never fails to continue higher until it reaches that top of the channel.
Purple box: After reaching the top, the market falls off again as expected, with no sig-candle on 5m, but with some bearish divergence on the MACD on the 1m as an initial clue. No sig-candles on 1m either. After a steep fall, 1m pulls up barely above the 0 line, and makes a great bearish gravestone doji harami that tanks again through all lows. Textbook except for the fact that the wave is very shallow at this time.
