Did anyone notice the E-mini drop to 899.25, a mere 2 points off the S1 pivot and then rebound and stretch to 914.25, only a 1.25 points above the Pivot?

I mentioned the pivots in yesterday’s post and told traders to keep watch of the 900.00 level. I also mentioned to watch for RSI making a bearish or bullish divergence relative to price. Take a look and see that as prices were carving lower lows (red trend line), RSI remained relatively flat, indicating that the selling was beginning to dry up.

As I’ve indicated in previous postings, whether in Blog format or the FREE Newsletter, anytime you see prices hovering around a key reaction level (pivot point) and RSI is also demonstrating a divergence, you can have very high confidence to pull the trigger.

In this case, prices fell from around 912.00 overnight and in the early morning hours to the S1 level and RSI is flat. This is on top of the fact that 900.00 is already a technical and psychological tipping point, an area most likely to cause a stir. Indeed that is precisely what happened.

Traders had a premier opportunity to enter LONG positions after appointing a reasonable SELLSTOP. The rest is history as prices marched higher to the daily Pivot on 913.00. By then traders should have been ratcheting up SELLSTOPs in an attempt to lock in the paper-move and get out with as much as possible.

For Thursday, the daily Pivot rests on 905.25, which means today’s settle on 905.25 is quite literally on the bubble. Prices can tip in either direction. The only thing to do is look at the resistance and support pivot points for potential reactions.

Here they are:

  • R2 – 921.25
  • R1 – 913.25
  • Pivot 905.25
  • S1 – 898.25
  • S2 – 891.25

Notice that 913.25 which acted as resistance today even though it was officially the daily Pivot, is now posted as a resistance pivot, the first level of resistance. Any chance prices get to stretch to 913.00 to 913.25 is very likely going to result in yet another reversal.

However, the same can be sdaid of S1 on 898.25 which is very close to 899.25 where prices found buyers to reverse the trade.

For more details on the Longer-term and Shorter-term analysis and trading strategies, you’ll have to sign-up for the Futures Reports.

In the meantime, let price rule the day and be sure to always trade with an appropriate STOP.