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Good morning, Traders! An interesting change could be developing for the E-mini Russell 2000 (RTY). The market looks like it's about to break the inner uptrend line and push into the sell zone. That means that while the long-term trend is up, the short-term direction is about to turn bearish.
We'll need a couple of days to confirm the change of direction, but now is a good time to prepare ourselves for the possibility that sellers could take over the RTY.
But this dip shouldn't worry us too much. This is how the market works. The constant ups and downs are just part of investing. The market trades in waves. When we see a sell-off coming, we wait for the market to recover and use our strategy to find buying opportunities at low prices on the rebound. It really is that simple!
For now, let's look at the timeframe analysis for the RTY to see what we can expect in the coming days:
The RTY is clearly breaking the inner uptrend line (blue line) and heading for the sell zone. This means that the sellers could be taking over the market. If it remains below that trendline, we can expect a sell-off to a lower price. The long-term direction is up for the RTY
The short-term direction of the market could be turning downward for the RTY
We're preparing for a potential sell-off in the RTY
While the overall long-term direction for the RTY remains up, we could see the short-term direction turn bearish. But we'll be prepared for that if it does occur! A bearish drop doesn't mean we give up and walk away. We just have to remain patient and wait for things to play out.
As we turn to the one-hour timeframe chart, we can see that the RTY has indeed broken through the bottom of the up channel and is heading to a lower price. We'll want to keep an eye on this development, as it shows the likelihood of sellers taking over the market for the short-term. Since the one-hour timeframe tells us when we can utilize our entry strategy, we'll want to monitor the RTY for the next few days to see if this trend holds bearish or breaks back toward a higher price. We'll know which way this trend will break if we continue to watch our timeframe charts. While the long-term direction for the RTY remains up, we could see the short-term direction turn bearish. That means the market, in the short term, could sell off to a lower price as the sellers take over the RTY.
But that doesn't mean we have to worry! My strategy prepares traders for these sorts of scenarios. All we have to do is focus on our timeframe analysis and watch the trend as it develops. But none of this will work if you don't know how to use my strategy! Follow along as I reveal the crucial aspects of my trading strategy that will allow you to become a profitable futures trader! Keep On Trading, In the end, trading is about execution. A detached, matter-of-fact execution that takes into account market data. It's those darn emotions that get in the way. What if you were able to execute every trade like you were cleaning up after a great meal with friends or family? Instead of each entry or exit being the heart-pounding, drama filled moment that it is (for many) - remove your emotions and treat it as though it just needs to be done. Like taking out the trash, you don't think about it. You don't shed any tears over the 5 day old ravioli or hamburger buns that you're throwing away. Why waste another second on that trade? Good or bad. Simply execute. And free yourself to see the market from a different point of view.
Stay tuned for my next edition of Josh's Daily Direction.
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Rabu, 18 Agustus 2021
August 18 | Should we prepare for a sell-off?
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