Epilogue – 6/8/2021

I did not trade the RTH session yesterday, as I was doing some sightseeing. In such cases, I hate to put points on the board looking in 20/20 hindsight. When I quote trades and points, it is because that is what I actually achieved trading that day. Looking left after a trading session and then saying “I would have done this or that.” Nothing is the same as being there and doing it when there is nothing to the right of your screen. So view the comments today with that in mind.

Yesterday saw a more serious liquidation break than recently experienced, and it helped repair some of the structures below us. The GAP was serious, but having opened so oversold and outside the Keltner Bands, more than likely I would have been looking to get long, at least for a scalp. What followed from the bottom was a weak bull trend with a soft rollover in the afternoon. The afternoon pattern was a broadening formation – which typically means that traders don’t know quite where to go next.

As I cautioned in the morning, it was not wise to get too bearish quite yet. We were transitioning from a bull microchannel, which normally morphs into a trading range or wider channel. So far, that seems to be the current case. Today (Friday) will tell us more. Also, the WEM low did do its job yesterday and contained the damage, so the worst may be over for the week.

There is another pattern you should watch for at turns, often presenting as mirror images of each other in the day session – but can appear in any time frame. Scrunching the last two RTH sessions, I have highlighted the pattern in gray on the chart below: