TradingLounge’s take on how to read the weekly ups and downs!
his works well for Australia on a daily basis for a bullish market, if it’s not occurring then the market is in a bearish trend.
You will need to prove this to yourself and it does sound a little weird at first, but here goes.
If the Friday close is strong, then Monday will also be a bullish day.
After two days of bullish moves you can expect some profit taking Tuesday morning, with the trend resuming upwards after the profit taking, which normally is the morning session. I call this a V shape pattern.
Wednesday is also a V shaped day but most often more volatile than Tuesday – but down in the morning and up in the afternoon.
Thursday in the Bullish Weekly Cycle is the bear day. It can open up higher but trades sharply down for the day and then back to Friday being bullish.
If this cycle doesn’t happen I know there is a change in trend – so knowing this is a huge help in many ways; such as knowing Wednesday and Thursday are the largest swing days. I know to keep my stops out of the way, especially if I’m trading a larger trend as I look to build positions partly based on getting through one week to the next, building positions on late Thursday afternoon, Friday morning and afternoon and Monday morning.
I also know buying on Tuesday is okay, but I have to allow for a wider stop for the bear day on Thursday and buying on Wednesday or Thursday is high risk. Late Thursday near close is fine, but not in the morning, even if the US markets have been up overnight because the Australian market will open higher but trade lower.