Friday's action has confirmed the validity of the recent balance breakout. A news driven downside move retested the important support, the recent balance breakout area, and found responsive buyers. Another news driven move helped to move away from that area. Despite the noise created by news the market structure remains intact and watching the right timeframe helps a lot even the day traders.
We are watching the new balance resolution.
- A break of the support may lead to a liquidation move into the previous balance. That may start forming the right shoulder of the H&S pattern
- A break of the resistance may lead to a trend up day to retest the new resistance level shown on the chart.
Another potential scenario is for the market remains in that balance and slightly extend it upside and downside leaving both the bulls and bears in a greater uncertainty.
The trader's task is to identify what scenario is unfolding. What should happen and what happened instead. The market never makes it easy for the traders but eventually it can't hide its footprints.
8/10/2019
We are watching the new balance resolution.
- A break of the support may lead to a liquidation move into the previous balance. That may start forming the right shoulder of the H&S pattern
- A break of the resistance may lead to a trend up day to retest the new resistance level shown on the chart.
Another potential scenario is for the market remains in that balance and slightly extend it upside and downside leaving both the bulls and bears in a greater uncertainty.
The trader's task is to identify what scenario is unfolding. What should happen and what happened instead. The market never makes it easy for the traders but eventually it can't hide its footprints.
8/10/2019
