(click image to enlarge chart)
The sideways doldrums continue…
The VST bull stops from the last 5 days have likely accumulated just under the recent low at 1140 area–shown by dashed blue line on the chart above. That would be the easy downside target here for a stop run, and if they decide to go get those–then the trick would be to watch to see if they reverse higher after those stops are taken–or if they keep driving it down toward the open gap at 1107.
To the upside, the confluence of the two converging trendlines near the yellow rectangle remains the key technical feature (in my opinion) as explained in yesterday’s post. Bulls would need to break through that first descending red trendline to start to trend higher.
Closest downside number to be gamed is at 1140 and if they go get the stops there, then I will set that as the intraday VST bull/bear line with an intraday bias of short below and long if it reverses back above.
The descending light gray trendline can serve as a trailing stop line for an ideal VST short entry from the ST primary trend line (last red arrow on chart above)–so those two levels could bound the immediate intraday action.
Not much to do here except to stay out of trouble while awaiting a resolution of the present consolidation zone. This type of boring sideways action can cause many traders to simply switch off the monitors and look for something else to do. Fast moves can come from setups like this–and the ones who continue to pay attention when others have given up are often rewarded for their patience.
Thanks to all of you who have sent me private messages through the feedback link at the top of this page. I simply don’t have available time in my day to reply to them individually–but I read them all and very much appreciate them.