By: Scott Redler
Yesterday the market stalled around the prior breakdown point, which usually turns into resistance. Today on a micro level we broke the 1147-1150 gap from Monday and filled it pretty fast. The next level I will watch is 1120-1130, which would be the area to turn if the wedge we highlighted earlier in the week keeps forming.
A wedge is a pattern of indecision that forms when the market isn’t sure which way the next direction will be. After last week’s huge volatility and all the unknowns in this world, this type of pattern makes sense. As traders we can trade both long and short in compelling areas. If you’re an investor don’t buy stocks, as we have been in a market correction since May 4th.
If you’re short I’d cover around here and look for a scalp long. Monday morning could be the time for it.
