Tuesday, May 3, 2022

Open

Day

Trades

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

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