Focus on Strategy – Comments by Jose 4/25/2023

Hey everyone, I hope you’re all doing well. I just wanted to remind you to focus on strategy instead of jumping into scalp trades. I’ve noticed that some of you have been asking about where to enter, but if you’ve been using the swingarm for a while, you should already know that the entries are based on measuring pressure and highlighting zones or areas of interest.

So, what should your strategy be? Locate the most current timeframe in Zone 4 and take the trade. The high-pressure zone (yellow or blue) will provide the best opportunities. Keep in mind that these setups take time to develop and may not occur every single day.

Please review the below example to see where the trades are.

2-day chart

On the 2-day chart, the price remains range-bound with support at 4100 and resistance at 4200. The pivot point at 4125 has been hit multiple times and is no longer noteworthy.

1-hour chart

The 1-hour chart clearly signaled sell setups with multiple warnings. The regression line acted as resistance and helped to identify the pending resistance zone. As the price dropped, it targeted the waves below and provided support for a potential backtest of resistance. The high-pressure zones of the 2-hour swingarm remain untested and may not see any price action until the end of the week.

30-minute chart

The 30-minute chart (recalibrated 28/6) provided clear guidance for setting up the 1-hour chart, as did the 15-minute high-pressure zones. Everything pointed to a short with extreme clarity. However, if the plan is to scalp a couple of points, it may be difficult to see the 30+ point setup.

As long as the 15-minute high-pressure zone remains bearish, there is a chance for continuation into the 4-hour zones. The point of control (POC) has been hit a few times, and buyers continue to show up. If the 15-minute chart breaks up, a backtest of it could give us a buy signal targeting the 30-minute chart and higher. For now, it seems that 4120 could also be a possibility if the 15-minute chart holds as resistance.

Follow Jose on Twitter

At market open, the 1-minute chart is in a squeeze between both swingarms. Price is at support and down-trending on the 15-minute chart. If you’re not currently in a short trade, there are no signals indicating a pressure-driven entry at the moment. Therefore, it’s necessary to wait for the right opportunity to take a trade.

1. Sellers Keep Control.
2. 4133 1hr and 4120 30 Minutes

As price breaks into the 4 hr zones, now 4092 can come in the near future… (next day or so??) Keeping in mind the several news events this week.

The below chart may help to identify the waiting period for entering Zone 4, after which you can consider entering in the direction of the 15-minute pressure while keeping in mind that there are support levels below.

As the 15-minute timeframe remains stable and the 1-minute timeframe shows a breakdown, the focus is on following the sequence of events in continuation of the established pressure swingarm, with 4120 playing out accordingly.

2nd Backtest and then continue with the trend. Remember to focus on strategy.

4120 – 4116 Critical Area.

Today’s setup appears to be quite bearish. While there may be some counter-trend opportunities, it’s important to note that these come with a higher risk of stop-outs.

4116 The 4 HR internal Pivot Level reached.

Level of Interest or Pivot: Focus on Strategy

When the price action approaches a level of interest or pivot, it is crucial to pay attention to any similar levels in other timeframes that may be nearby. This is because when levels across different timeframes are in close proximity to each other, the price tends to test them all before making a significant move that could result in a turning point or reversal.

The simplest way to identify a potential turning point is by observing a breakup or breakdown of the current trend or swing arm. Today, the 28/6 broke down and has not cycled bullish, indicating that the trend remains bearish. However, if it breaks up, it could signal a potential counter-trend possibility, such as a cycle within lunch hours or an actual backtest of resistance with more energy to bounce.

As the price of ES500 futures continues to decline and breaks through levels, new targets come into play. When the price reaches zone 4 on the 4-hour swingarm, the likelihood of a bounce becomes more apparent. However, the challenge lies in determining when this bounce will occur. The larger the timeframe, the longer it may take for the price to respond to the level. Sometimes, it happens quickly, while other times, it takes a couple of days. There is no set rule for how the price will respond, if at all. This is where risk management becomes crucial in trading.

4100 is a Magnet Level.
4094 Four-hour Pivot is a Magnet Level.
4083 One-hour Trend 8 Wave is a Magnet Level.
4068 Thirty Minutes Trend 10 Wave.

As you review the charts to your left, all the levels are there. You get the picture.
How do we know which one will be the one?

Over the last few days, I have indicated that the price is likely to test the 2-hour zones above. It is important to consider the energy required for the price to reach those zones, which is determined by the timeframe counterpart. The 4-hour swingarm zones possess the necessary energy to send the price backtesting the 2-hour zones. Keep this in mind in the upcoming days.

Price Action recognizing support. Too early to say, it may be until tomorrow’s session, but this is a start. We need to see swingarms break up.