With all the questions surrounding the risk appetite and risk aversion seen with this week’s volatility, it looks like indecision will have the final say as the week closes out. The U.S. Dollar has re-entered the range as the index has slid lower back below 79.00. This further confirms the likelihood for distribution on the daily time frame.
The Dow on the other hand has had a much more volatile week as within just three sessions the market sold off only to rally a day later to a neutral stance on the week. The current resistance at the 20 period simple moving average is holding and 11200 continues to act as a ceiling near-term.
I believe all this analysis continues to increase the importance of shorter-term time frames and being nimble as the markets try and decide whether or not they are favoring risk appetite or risk aversion session to session. This lack of an organized market sentiment and therefore volatility will test the patience of traders looking for longer-term follow-through on 240-minute and daily time frames.
I am handling each trading day with more caution and patience. While the five-minute time frames are not necessarily cooperating consistently, I believe they are offering the more nimble and clearer looks at shorter-term trends which will not require continuation from one financial center to another. “Between the Greens” entries are a staple for me this time of year since I would like to engage in the market’s movement (and volatility) but know that organization of market sentiment and momentum will not necessarily yield longer-term consistency of trends.
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