2) I waited for the price to confirm resistance and then return to confirm support.
3) I watched for volume to tell me that my support was in the right area.
4) I waited for a trigger, which today was strong divergence on the 9 range and a reversal on a 6 range.
This move may have a long way to go. There is a lot of arguement for support zone #2 being reach today, and I will be watching for it, but for my personality I prefer to get in and out as the wave moves along.
I am going to. I am more interested in the 10:30am EIA. We could see a retest of support.
Think about what just happened over the past 48 hours. Crude ran up and up, until most shorts were out. It reached an area of defined resistance, and so when it started to turn there, the long positions started to exit to lock in their profits. The trend was up, but new positions were going to wait for support before they got in, so price just fell and fell. Meanwhile, new short positions had entered the market at the resistance area, and when they saw that support might hold (as indicated by the volume), they wanted to lock in their profits, and so the cycle reversed.
Where crude goes longer term is tougher for me to read, but short term, the above scenario makes sense to me, which makes it easier for me to trade.
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While I wait for EIA, here is another shot on a 6 range. This is a favorite of mine for being very visual and easy to look at.
I entered on the DC when the bars turned white (after confirmed support, white by itself means nothing). I exitted when price hit the 786 area. Could not explain why, other than I knew the EIA was today, and we just had a big move down overnight.