Trading Plan – The weekly chart is not yet indicating direction.
Looking at the weekly chart on the S&P500 emini futures market for April 2016. In our trading plan let’s look at this past week. Once again, we see last week’s price action is contained within the previous candlestick’s high and low, with a down move of 25 points. This indicates no real direction for a continuation for this week. The range last week was 40 points and showing more commitment on the seller side volume.
The sellers have taken a little of the steam away from the buyers but have not made a big enough commitment to carry through to break the next level of support. Watching for the buyers to move in and bring this back up 15-20 points before loosing momentum and turning back over to sellers to continue this move down the previous psychological support level around 2000.
If we see large buyer support at the 2000 area and some follow through in the days that follow this could be enough to engulf this past weeks price action and keep moving towards the market highs of 2100.
If we see sellers commit to more volume and a move through the 2000 support then we could see a test to previous swing lows shown at 1975. **Note the uptick in volume last week on the sellers moving in.**
Where could the top be for this Trading plan?
Resistance may be coming in at 2065, with the previous swing high in 2087-2092. Our long term market high is 2100, psychological resistance, which remains as a good target for buyers. This was tested last year in May, June and July of 2015.
The weekly chart is an easy way to catch the direction of the market. It shows you the price action without all the noise and makes the major support and resistance from trend lines and previous price action very easy to follow. Using these previous swing highs and lows, you can then transfer them to a shorter time frame for targets and risk management.
Trading is high risk and care should be taken, if you are not familiar with the market it is best not to trade it at all. Using a trading plan can be part of your risk management. Always trade with a stop, and never risk what you can’t afford to loose.