Swing Trade

Swing Trade

Here is a swing trade that had been setting up for the past few weeks.  We discussed this in last Thursday night’s Deep Practice.  Each week, we look at what we are anticipating for the coming week.

As I noted in an earlier post this week, the weekly chart closed flat.  Given the other considerations seen in the background, we were looking for a drop in the market.  Volume picked up on the weekly last week, indicating selling was stepping into the market.

We got that drop today, exceeding the target by a bit.

Swing Trade: Higher Time Frames

Why would we be expecting sellers in the market?  Because of the weakness in the higher time frames.

Here’s a chart of the quarterly S&Ps.  Yup.  We look at the quarterly and also the yearly.  All have something to say.

Note how volume diminished on the rally into new heights.  This is especially true for the last two quarters of 2017.  Then, coming into the first quarter of 2018, the quarterly reached for new highs, but fell back to close underneath last quarter’s high and close.  It did so on a large increase in volume.  That’s selling.

We may push up first into the 2811 area (we have current resistance at 2815, FWIW).  This is a long term chart, so patience is called for.  I note two characteristics worth considering in the current quarterly bar.  This bar hasn’t completed yet, so this may change.  Keep in mind that the quarterly bar will end in a couple of weeks on June 30, so things may change.  The current bar, however, is an inside bar, indicating loss of momentum, and it is rising on low volume, which would be no demand.  It suggests a bigger downside move is possible.  We’ll be looking carefully at this over the next several weeks in Deep Practice.

Swing Trade: Deep Practice

Interested in Deep Practice?  It’s a weekly program where traders from across the globe meet and practice their trading craft. We focus on day and swing trading their rich educational content and presented in Deep Practice.  We look at the higher time frames (like this post) to home in on the likely next move of the market.  After making a game plan, we then trade this market, walking forward the historical data, bar-by-bar, making trading decisions, taking trades, managing trades, etc.  Questions are raised and details discussed so that everyone understands.  Interested?  Learn more here: Deep Practice