Trend down yesterday hit deep price target of 1577 handle…we had issued a “prime turn alert” near 1580 which suggests “end of trend” soon to be followed by reversal. Overnight trade has produced a 10-handle bounce from settlement.
Today marks quarterly options expiration, so there could be residual volatility as traders square out positions prior to weekend.
Key levels for today to consider are prior day low (PDL) at 1577.00…Potential retest could happen today if sellers dominate. Initial upper resistance 1604 – 08 zone…Central Pivot Zone between 1589 – 1600 is current balance point as price may just chop sideways in range type trade to absorb and consolidate prior two day sell-off. Remain Flexible!
I take the long term view. I am willing to lose in the short term. I understand that losses are a necessary cost of doing business, like inventory to a merchant. Drawdowns are viewed as temporary. I realize that my wins and winning periods are part of the broad process. Each trade is but one in a string of trades. What is happening now is one piece of a much larger puzzle. Because of this I do not get overly euphoric or despondent.