25 August 2017 (8:29 AM EDT)
There is still an hour to go before U.S. markets ring their opening bell, so we have time to chart our trading maps and be ready to tango with the trend, no matter whatever direction it choose to go.
As we have been observing, major U.S. indexes have been staying in a broader range and have developed a smaller range within those bigger boundaries. This is 4-hours chart of Dow Jones, which shows those two stacked ranges:
Now,when we changed the time frame to 15-minutes, we get a close up of last session’s trading range. Dow Jones futures are trading higher at the time of writing, indicating an opening near 21,831. So add a line at this possible opening level, and you get a chart like this:
This chart clearly tells you two possible intra day trading zones for Dow Jones. It will either go up, or down below that opening level. To get a more precise picture of its trading levels and be ready for your trade entry and exit points, add today’s intra day pivot mark, previous high and previous low levels on the chart. These levels will mark an immediate trading range. Add intra day support and resistance levels and you will have a broader trading range on the chart, which, when trading starts, will give you an exact “map” to follow the price:
The simple technical trading rule say, if price trades above the pivot mark, it will most probable trade higher and if trades below that mark, it will most probable trade lower. With this kind of “trading map”, you will immediately see which way the trend is turning and what will be its upper or lower boundaries.
All you have to do is, trade with that trend.
U.S. markets have been witnessing choppy trading patterns recently and that will continue in this session too. Major indexes will remain range bound in a broader or narrower range.
Watch the upper and lower levels of that range and trade with the short term trend.
Good luck, enjoy the session!