Trading Lesson: Price & Time Vibrations before a News Event Happens


Jeff Greenblatt Image Jeff Greenblatt Director, Lucas Wave International, LLC

Never front run the bars because markets will not always turn on a Fibonacci cycle so it’s no panacea. But when they get to key strategic points on the chart, such as support or resistance there is a much greater probability of success. In this case, resistance turns out to be 233 which is a key Fibonacci number but also at 21987 where the 987 aspect is also a Fibonacci number.

chart 1

Resistance turned out to be an interesting mix of price and time. It started to drop and found support at the breakout point of the prior leg up, the base of the wide range green candle. That was a strong area for buyers. They tested and defended well.

Here’s where price and time get interesting. The bounce from 967 balanced at 66 minutes from the prior high. The drop started on the 66th minute which is a margin of error of one. At first, it was hard to understand why the pattern turned into a ski slope. But when I turned on the television I found out special counselor Mueller impaneled the grand jury which is a major news event.

Some traders like to play news events. This is a big mistake as sometimes the market will react favorably, other times not so much. It will depend on where we are in the cycle. As we’ve seen with earnings, in a bubble-like environment if earnings are not priced to perfection they can get taken to the woodshed. In terms of important news events, I discovered many years ago the time cycle will develop and the news event will suddenly manifest.