Trade Setup For 25th July

Here are the zones I am watching for the 25th July:

Resistance

1255-1256
1262.75-1263.75
1269.25-1270.25
1277.25-1278.50

Support

1246-1245
1240.25-1239.50
1233.50-1232.25
1222.25-1221.25

My Outlook

Now we have a bit of a patience game over the next week or so. If we pick up on the acceleration of selling here we may go to new lows. That would fit my initial thoughts on this bounce not being the bottom. However if we fail to pass the lows made mid this month things could be looking better for the long side.

The VIX appears to be making another run, if we follow my thoughts from last week, we could have opened up the doors for higher readings on the VIX. Not much is happening with Gold and Oil at this point, both are looking to bounce, how high is the question to ask.

The USD hasn't made much of a change though for it to continue its strengthening it cannot afford to weaken where it is now. To break its recent weakness it needs to break the current trend lower it is following.

For me I am keeping my bearish outlook for the short term following on from yesterday. I will remain that way unless we shows signs of strengthening prior to reaching the previous low.

My Focus

Currently we are hanging around the 1251 area in the overnight market. The pivotal area for me today is the 1263 area. I am looking for possible early strength which is hit by some selling power at 1263. Anything beneath there is stronger on the selling side for me and any long trades will be kept on a short leash. If we gap lower at the open I will look for some selling pressure to hit should we reach the 1255.

I will keep trades restricted to the s/r areas. Any long trades will need to be at the support areas with extremes shown on the Tick and volume. Anything less with be left alone. Stops will be hidden behind strong market areas and initial profit targets will be in easy to reach places. The second lot will be trailed.