Market Sense and Sentiment

[bbgold]

Here is a five day chart to look at the support and resistance levels that may help you see what I am looking at and Trying to learn. You can see from the 3 month chart that 9700 looked like support and 9850 resistance from the last week. When the market retested 9700 and found support then that would have been targeted as the LOD, or near it, and you would have purchased some Calls. The next resistance would be around 9725, which was the most recent previous support, so that would become the short term resistance target, which it did. You can see the next previous support level was around 9750 so that would become the next target should the market break the resistance at 9725. You can see that the market moved a little higher than 9750 but by watching the realtime quote you could wait to enter a position based on when the price movement slowed down or started to reverse. Using the Hindsight of the previous resistance as a target then that was Estimated to be the HOD and I purchased some Puts. If you look at the previous resistance of 9725 that would now become your target for the next support level, which it turned out to be. The next resistance level should have become 9775 again but the breakout this morning blew out All of the resistance levels until it came back to where? The previous resistance at 9850. Seeing that the price was well above the moving averages I Estimated that would be the HOD and once again purchased some Puts. After the stall at 9850 then the next support level would be the next previous resistance level which was around 9800, pretty close to what happened Eh? I do not know Why the price action follows this support and resistance pattern but it does. I am still not sure of the reasoning behind the price constantly moving back to the moving average once it gets too far away from it but it does. Bernard and I have been trying to use the fact that these things constantly repeat to be able to trade the index options using the information. Now that the markets have entered into a consolidation or trading range the Work becomes watching for the price to either break out Above the resistance or Below the support. Then the next target would be picked from the previous support or resistance. If you take a look at my posts I will usually put in the levels of support and resistance that I am looking at. I hope this helps explain what Bernard and I are trying to learn and use here. I hope that you can join us in helping to critique what we are posting. Good Luck Don! Sincerely, Bob :^)