JULY FIREWORKS

We have been discussing in the blog and the webinar about the importance of July over the last five years.    This time  we see a number of positives that can make July a big mover.

1. With the government seeming to be out of the bond market buying  Q program, investors will switch to equities
2. A market that has under-valued earning.  Expectations have been lowered thus better earning reports will be a bullish catalyst.
3. The large horde of cash waiting for the train to leave the station will jump into the market causing a summer spike.

TODAY:


It did not take long for this to turn into FUN FRIDAY.  The pre open US Market was trading in a bear channel.  There was a long play for the channel TL BO combined with the mid BOT and EMA support.  This BO was expected to reach the long BOT.

The long was followed by two mid BOT shorts directed at the SH BOT.  The theory is that price denied at one range, will move to the opposite range.

Once the exit hit, the focus switched to a reversal setting up at the lower BOT.  The 50% control bar is a preferred play, and it was at 1314.5.  The long at 1314.25 was taken.


click to enlarge

Once in the long, the expectation discussed was a run to  a market +5 L2H (low to high  or can be H2L),  and a subsequent move by the market to a +10 L2H.  In a good trend, the market will search for both targets.

Additional long bias clues were the mid BOT/ EMA+ BO followed by the long BOT BO.  Since we had a test of the LB and the FBO of the SB, this run to the LB was a perfect long setup.

LB +  and EMA+.  When a BOT breaks, we expect a trend to develop.


PM UPDATE:

BO trend day with no break of the 50CB TL

Have a happy and safe holiday to all in the States.