18 August 2017 (8:43 AM EDT)
U.S. stock futures are showing mild gains, indicating that U.S. markets may seek to take a breather at nearby support levels after a drastic fall yesterday.
I hope you are not paying attention to mainstream media, which is painting yesterday’s drop in U.S. markets as “the end is near” slogan and spreading fear and panic. U.S. markets are in an uptrend and will remain so until Dow Jones drops below 21,000. Even after that, this mega index will remain range bound till 20,372 mark. Take a look at this daily chart, which shows strong support at 21,600 and other support levels after that:
When it comes to intra day trading, I am a fan of hourly charts and these charts are showing two signals that may provide some buying support to Dow Jones. These are:
a) the index has fallen deep into oversold territory, as shown by RSI, and
b) A major support at 21,700. This is how the 1-hour chart looks:
Please remember, these signals may not work if any negative political news comes through as markets are jittery about political situation in the country. On the other hand, any positive political development can also provide much needed relief to markets and in that event, a bounce back from support levels could take place.
In the current scenario, one can hope for a narrow range bound session in U.S. markets today, where major indexes will trade within their intra day support and resistance levels.
Watch those levels and trade with the short term trend, whether it goes up or down.
Good luck, enjoy the session!