Trade Setup For 24th July

Here are my zones I'm watching for 24th July:

Resistance

1285.75-1286.75
1290.50-1291.50
1300.50-1301.50
1308.50-1309.75

Support

1278.50-1277.25
1270.25-1269.25
1261.75-1263
1256-1255

My Outlook

Yesterday gave us a pause for the recent rise we have seen. I am leaning towards some movement lower or more consolidation right now. The reversal we have seen from the lows does look much better than I first expected. I'm not convinced it is a turn of broader trend yet but I do believe it is stronger than I first anticipated.

There isn't much to report on the VIX. Gold and Oil have both seen decent sized declines which is positive for the stocks. That leads me to also put more weight on this turn we have been seeing. It may in fact be the bottom if Oil continues its decline as it has been the major contributor at this stage to global inflation. The cause of many countries worries.

The USD has seen the strength it's needed. My guess is that the Oil and Gold funds are moving out of those two respectively and into the US economy. It would make sense.

My Focus

Currently we sit at the 1280 area in the overnight market. The speed of the move up over the past two days has been fast so we are likely to see an extended consolidation or small drop.

For me the pivotal area is 1278. If we gap beneath that at the open I would be looking for some weakness to enter should we reach back up to the 1278 area. If we are going down, the 1270 area is where I would be looking for some strength to enter the market. However I don't believe it will be as strong at holding as 1262. There is likely many traders stuck in that 1262 congestion area prior to us rocketing off late on Friday.

If we gap up at the open, 1291 is the important area for us to break through. If we can't do it and some weakness hits, I'll be looking for some possible downside movement to push us back into yesterdays range.