I am getting packed for a trip, so I am not trading this afternoon; and therefore this commentary smacks of Monday morning quarterbacking, but I wanted to point something out (I have only a few minutes):
The retest of the morning's low at 12:55 EST took place on significantly higher volume than usual. Wyckoff and other early twentieth-century traders liked to see high volume at support levels, since that indicated that a possible bottom (short-term) was in the making.
My point: Look at the volume. One minute charts are notoriously noisy, but they do provide insight as to volume. When you see volume spouting up on 1,2, 3, 5 minute charts (I use 1 and 3), get ready to buy.
Does it always work? No. Of course not. But it IS a clue. At least in my own testing and experience.
And, yes, sometimes it results in losses. In this game, everyone sometimes plays the fool. You have to willing to risk looking foolish if you want to succeed. Breakout traders might snicker (buy on big volume only during congestion, they may say).
Buy on big volume at support, and wait for a bounce. If the bounce looks sick, a mere pause in a strong downtrend, and the market DOES continue strongly down, then get out. One can always get back in later.
Have a great weekend, guys.
