Posted by Pete Stolcers on June 7
Posted 9:30 AM ET – We are still up one day and down the next. The volume is light and the intraday action is very choppy. China is rapidly reopening and that is a good sign. Australia raised rates and the ECB is expected to. The FOMC meeting starts in a week. We have CPI on Fri. Rising interest rates will create some nervous jitters. If we zoom out to a weekly chart we can see an acceleration in selling pressure. I suspect that the move last week was short covering and we need to watch the half way point of that long green candle. This is no different than looking at a shorter term chart. Those giant solo green bars after a heavy round of selling should be viewed as short covering especially if they are instantly reversed. If that candle can hold for a few more weeks it will be a sign that support is forming and that a more substantial bounce is likely. Until the volume returns, reduce your size and trade count. Avoid trading the open and wait for your windows to set up. Please view the chart below.
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