Yet Another 100% Retracement...

We talked about the bullish bias this morning and the price action followed through with a strong move up in the afternoon session. We saw the erratic chop we expected to see, but the 15m chart formed a nice wedge with some early indications that the bias was going to be a move to the upside. The LARGE green area shows the 2 support bounces we had this morning on the 60m chart and the blue area shows a higher low within the wedge formation. The small green highlighted shows the wedge breakout to the upside. A bullish entry around $1506.65 would have been a good low risk entry with a stop at $1506.25. We would typically expect a strong move on a wedge breakout regardless of which way it would have popped, so potential strength of the move would have been a positive factor for entering the trade. Once it broke out to the upside, the target became yesterday’s highs and ANOTHER 100% retracement that we continue to see in this bullish environment. Lots of disappointed Bears again today, but tomorrows another day… I’ll post more tonight on bullish targets, but also look for another potential reversal tomorrow as we’re sitting right at resistance again. With no news or reason to go up tomorrow we could easily slide back into the channel again. Also of note in that wedge was a failed topping tail (looks like shooting star)—it was the candle just prior to the wedge breakout. This is why it is very important to wait for topping tails to confirm before entering a bearish trade. In this case even if it would have confirmed with downward movement, one would want to wait for the price to break “out” of the wedge to the downside before entering.