Subtle Price Clues To Look Out For
These are major market tells, watch for them
The market has ‘tells’.
Price often gives us clues to the next move, we just have to be in tune with those clues.
One of the best clues to true supply and demand imbalance is price response.
How price responds to certain events and levels gives us a really good insight as to who is steering the ship.
Bad news
If so-called ‘bad news’ hits the market. The market will often take an initial dive.
This is the headline algos scanning the news and then firing off sell orders to capitalise on the first-to-market edge.
But, if price then starts to recover, and even goes higher than it was BEFORE the news hit. That’s a big sign that buyers are in full control.
If people are prepared to pay a higher price after bad news, what will it take for the market to go lower?
That’s a sign to align long. Or at the very least abandon shorts for now…
Key Level
Another ‘tell’ is how price reacts to a level.
If there’s a solid support sitting there and price breaks through, what does it do next?
- Does it sit there?
- Does it drift lower?
- Or does it pop up with more force than pushed it down?
And even then, what happens, just a relentless bid?
It’s a big clue that buyers were just waiting for a trigger to get active, and now they are it’s a one-way street.
Basically, anything that ‘surprises’ people often yields a fantastic trade.
Confusion just adds fuel to the fire as the logical crowd throws good money after bad.
“Man, this market is higher on that bad news, I’m so smart I know we should be lower”
And we all know how that ends…
Something to watch for.