Today was a typical trading day prior to a holiday: not much happening in the markets. Usually, it is not a good idea to trade on short days or prior to long weekends; it is better to take the day off and enjoy a day with the family or do something that is not market related, IMHO. I was hoping that today /ES (E-mini) would hit overbought on the hourly chart, and although it came close to doing so, /ES hasn't reached overbought on the hourly. I expect this will happen on Tuesday and depending on the volatility, Tuesday could be a good day to go short.
I am not recommending a short position though, we have to see how Tuesday behaves to determine which way to go. The 4h chart shows that /ES is coming from oversold and could go to overbought; however it doesn't mean that /ES cannot re-visit the oversold level again before going to overbought. This is why I am still in cash and waiting for a signal to go either direction. Have a good weekend and Happy Memorial Day.
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