Well quite some volatility on the UK and US MArkets last night, with the US Markets seemingly ending with a bang....
Some of the wiser peeps might be able to say why....
Just wanted to re-visit something that I mentioned on Sunday as part of Robbbbs Thinking Aloud Thread.
In that thread, along with all the other peoples good work, I did a study of the XJO, starting from a 5 min chart and working my way up through to the daily.
I showed a couple of techniques I use to help my trading on the shorter timespan charts, including the use of the 13MA and the 21 MA and wondered if they worked on the larger timespan of the daily.
The first chart shown was the state of the XJO on sunday...
My comments in the post were
We are approaching the 13MA... A pierce and hold of the 13 MA when it is this far away from the 21 MA is a reasonable long entry, target.. 21 MA (thick red line above. Interestingly enough the previous rise... just visible in the zoom at the left is roughly the same height as the 13 MA current to 21 MA. This adds weight to targetting the 21 MA as an exit for a long once the 13 ma is pierced and retested.
Tuesday Morning, the chart looked like this: Note this is IGMarkets ITFinance charting package and the start of daily bars can be a bit wierd as they use the UK server timestamp
I made a comment in a post that having now pierced the 13MA we needed to retest the 13MA and then continue to the 21MA... further observations during the day showed me we had not actually retested the 13 MA during the night and we proceeded to do it during the day (which got me all confused and caused me to exit my long term long amongst other things, lol). interestingly enough we tested it lmost exactly before resuming upside.
So... as the original post said... a fair scalp target was the 21MA after the 13 MA was pierced by price and retested...
And waddya know... with last night's action...
WE Got IT!
W0000t!
Okay from here... things are a little less straight forward... I generally find on the lower time span charts that Price can react quite strongly to the 21 MA and may reject it, straight back to the 13 MA or bounce around a bit beneath begore piercing, possibly going for a bit of a bolt, then coming back down and testing again...
If this daily chart is indeed showing a Whooshka... a pierce of the 21 MA may see a very large bolt to the upside.
To be honest though, I have my doubts and mentioned these in the Robbbb thread post. Now, I'd suggest a few days of downside, maybe after today may be the go... but the uncertainty of price action around the 21MA means ultimately...
(20min delay)