Yesterday’s testimony from Janet Yellen was warmly embraced by the financial markets as evidenced heavy institutional buying pushing indexes up more than one-percent. Looks like we have our question answered of past two sessions…It’s clear that Bulls are squarely back in control.
Before we get all giddy, we need to keep this price action in perspective…The average stock has gone nowhere during the past two-weeks. Price has retraced 5% of it’s prior 6.25% loss suffered last week..back to a level where there was more distribution and lack of buying interest. So price basically is currently contained within a well-defined range. Now the real work for dominance begins for bulls and bears.
Given the strong move yesterday, it is only natural that some pause and back n fill action take place. Today’s trade strategy will be to anticipate more two-sided trade within developing consolidation. Key Price levels of interest are 1808 – 1812 zone…Look for responsive buyers…Recall the 1808 was a “hard-edge” yesterday as aggressive buyers held that price point to the tick…IF prior day high (1819.50) is penetrated and converted, THEN upper targets extend into 1822 – 27 zone with a multi-day High-Volume Node (HVN) at 1832. Failure to convert the high could keep further advancement contained within inferred consolidation.
I am willing to accept loss. Losing is an integral part of the process. I know and accept that individual losses and losing periods will happen. They are endemic to trading. I do not like loss. I do not expect loss. I simply accept loss as a cost of doing business.