Trade Setup For 30th July

Here are my zones I'm watching for the 30th July

Resistance

1262-1263
1269.25-1270.25
1277.25-1278.50
1285.75-1286.75

Support

1257.50-1256.50
1250.50-1249.50
1242-1241
1233.50-1232.25

My Outlook

Well we certainly threw a curve ball yesterday as Oil fueled the market into a nice gain. It is in fact enough to have me assessing this as a 1-2-3 bottom for the moment.

The VIX has made a similar pattern as the indexes but just in reverse. We now appear as though the volatility and put option interest is ready for a decline.

Oil and Gold made a surprising decline as I thought we would at least make a small bounce. At this point I will go with the flow but Oil does seem to be impacting the indexes pretty heavily lately.

The USD made some further gains yesterday which is also adding weight to the stocks making a run higher at this point. As always though I will take things with a grain of salt as each day occurs.

My Focus

We are currently trading at the 1261 area in the overnight market. As my bias is slightly bullish at this point, I would like to see a small retracement from the market prior to making possible further gains. Ideally we would see some reluctance to sell off past the 1257 area however a retest might be warranted down at the 1250 area. If either of those are met with volume and/or tick extremes or divergences, then I will look for some further gains to the upside.

If we gap above the 1263 area at the open, I would be looking for some signs of weakness to hit at the 1270 area. I wouldn't put too much weight behind a move down from there as a trend reversal though. If I do enter short up there I will keep the trade on a pretty tight leash and be ready for a trend continuation should we show signs of doing so.

For me the focus is going to remain on doing my best to trade only at the s/r levels. As much fun as riding a bucking bull is by trading everything under the sun, yeah right, I want to get my game back on track.

There is only a few ticks of lenience I am giving my s/r levels. Yesterday I made some decisions to trade in the middle of s/r zones which I would like to refrain from doing today. I am going to continue keeping tight stops behind strong areas and place my initial profit target in easy to reach areas. Trailing the second position as usual. Again, I'm going to take the casual approach to my trading but remember to only trade at the s/r zones.