Hidden Support & Resistance
Are you aware that there are hidden support and resistance areas most trades don’t see? This hidden support and resistance isn’t derived by some fancy indicator. And, it’s not really hidden if you know what to look for.
Markets will tend to trade around a given level, up and down, back and forth. It allows larger players to accumulate and distribute stock or contracts. We look for this on all time frames and see it frequently across all markets.
In this chart, the market traded a fair amount (for the intraday time frame) around the 2742 level. We see that the S&Ps stopped there around the 10:00 time period, tested it about 10:30, pushed through it at 11:00, and tested it twice before going lower. After becoming oversold, the market rallies and hits that level again (purple dashed line) for a short opportunity.
You can see thus far in the current trade, we are heading back down. This could get going for a good down move.
Why do I say that? Because overall on the higher time frames, we are negative. So, there is a lot of pressure to move the market down. Also, after making a new high on the day, we may very well be putting in a lower high. If that is true, we are likely to see a decent down move, breaking yesterday’s low (green dashed line) and heading down towards the 2729 area. The new supply coming out in both the price action and wave volume indicate the 2-Day High will break. So we will try and hold this trade to see it it will push through yesterday’s high for lower prices.
The trade continued down and ran to the last swing low at the 2729.00 level. Here we take a portion of the trade off. Although the market is weak, it could stop here and rally. Why lose that profit? Also, the market has run over 10 points on this swing, so some kind of up move is likely. We book a little profit and wait to see how the market responds to the support.
We made it through the last swing low and now headed towards the bottom of the trend channel. I put a bid to buy at 2724.00. This gets filled and the trade is completed. The market continues to fall lower. We are no longer short. Oh, well.