Trading Recap: June-July Volatility

We have seen increasing volatility defined by short term trending activity within the larger boundary structure defined by the Monthly overlay channel of the Nasdaq 100 (NQ Futures Contract) between the 2400-2280 range. These oscillations have carried the market to 'potential' monthly reversals of the 'Major' trend of the market, but have successively failed, closing within the confines of monthly range (2400-2280) by months end. Thus, the condition of the market to date is a Major, Multi-Month holding structure, which is revised from an outright Bullish to Sideways Condition, given the dated time period of 5 months without any embedded Weekly or Monthly trending. Given this Macro condition, we have to adapt by adopting an agile and maneuvering positioning strategy to capture the whip saws. Here's how:



Late June saw the market violate the 2280 monthly lower boundary. From this perspective, it looked as though the equities were in process of changing direction on a major level. But, the end of June saw the market rally back within the monthly range as per the chart below to defy the structural breakdown.

We can see from the 'macro' daily chart below the entry signal for a long position 6/28 with violation of the Weekly channel top.

The hourly chart below shows the NQ mini rally to the Monthly channel top at 2400, from the 2260 Entry for a fast 2 week short term trend that saw 140pts of profit. See the Green arrow below show the entry with blue overlay lines representing the weekly boundary and brown overlay lines represent the monthly holding area for context.

Gratefully accepting the markets 'fast' profits, the conditions transition into more complex intraday movements that see the initial violation of the hourly structure denoted by the red arrow below. This is a tough bet to play from the short side within the context of weekly support coming in at 2351 and defined by the lower blue line overlay below. I hesitate and did not take the initial breakdown due to unfavorable expectancy on this trade. Instead, I utilized my day-trading strategy to capture small profit as the market edged lower towards the psychological 2350 level in the mini's.

The transition into faster trading becomes more of a visual recognition based on intraday movement up through the 3 day rolling pivot range with violent hourly reversals and 'weak' closing. This can be observed above. We do however get a nice long signal, defined by the green arrow above, on top of a 'tight' pivot range (< 4 ticks spread), implying directional movement and with an early gap move in the price action through the overnight highs. This implies strength with the market finding its support at the weekly level of 2350. I take it long from here. I get lucky as the runs to retest the 2400 level again.

This time at the top the trading activity gets dull and narrow over 3 days, and begins to rollover into this latest trading week which has seen the equities global come under extreme downside pressure.

From the chart below, I show you an up to date visual on the current open trade defined by the red arrow entry early July 27th and the market current position as of the close today.