TUESDAY was a narrow range day, With volatility, these are important for BOs which run for BO-5/10 to extended runs of BO-15/20. We watch for the BO-10 to retrace to the BO-5 level. When this occurs, look for a range reversal/range run to the opposite BO.
Tuesday's bear turned Wednesday's bull. Anticipated, planned, played, profited. All from the ranges. Some bar-to-bar looks, but in relationship to the ranges and the BO levels.
Some key areas to review, and remember for future trading.
1. Price has traded in after hours around the B)-10 to BO-5 from Tuesday. At the open, we have a 50CB reversal long. The objective (re BO-10 back to BO-5) is a range run.
2. PA holding at the EMA and the LBOT. The expectation is a BO-5 minimum. Some were looking for measured moves. Nothing wrong with that. The ranges and expectations are pre market. When actual PA hits those expectation and we see other (now that they have some PA) measures offering similar thought, make the trade.
3. A two bar reversal signal was developing. In a strong trend, it will often be a PB only. We see a 50CB setup and PA resistance just above the BO-5 level. All suggesting a PB, and it was anticipated to hit 1298.5.
4. A PB test of a prior 50CB at 1298.5. Support in a trend worth the long.
The BOT System (break out targets) provides trading directions prior to the actual market and is a calculation based upon the PA dynamics in the market. We long or short based upon the PA rules which look for key areas where the bull or bear will dominate and establish a trend. These trends are captured as range reversals, range runs, and BOs.
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