Every other day …
Echo, echo, echo …. This looks much like a repeat of Monday’s (8/28) action. A quick, tradable pullback followed by a day of sideways oscillation. The range was a little wider, and if you play divergences it was possible to catch several of the swings.
The pullback over the first 30 minutes gave a tradable entry as the moving averages showed a strong uptrend from yesterday. A very clear stochastic pattern marked this second rise through yesterday’s high (green line.) Five points later, and the moving averages start intertwining for the rest of the day.
At 9:30 (Pacific) there was what I call a weak DIVERGENCE for another long entry. [Weak because price didn’t make a lower low.] I wouldn’t take the stochastic signal half an hour earlier because it was below both moving averages. For that I will usually wait for a divergence.
The new high at 10:30 came on lower volume and with another stochastic divergence. By the time you get the bottom at 11:45 you could have recognized the pattern as a rectangle, and it bounced to the top of the range in a straight line. Once again, the clearest and best trades are coming in the first hour. Tomorrow and Friday may be non-events as everyone heads out for the last three-day weekend of the summer. I think I’ll join them and post again next Tuesday.
