Executing the Trade: Entry Strategies and Patience
With the weekly bias established by the chart and the central level as your guide, you can now look for an entry.
Method 1: The Confident End-of-Week Entry An investor or a swing trader might open a long position around the close on Friday or the open on Monday, based on the strength of the weekly setup alone. The plan is simple: stay in the trade as long as the price remains above the central level ($535 for $SPDR S&P 500 ETF Trust(SPY)$ , or $5,384 for $S&P 500(.SPX)$ ). This approach relies on the power of the weekly signal.
Method 2: The Patient Pullback Entry A trader looking for a better risk-to-reward ratio might wait for a pullback. This is where the use of 4-hour (4H) and 2-hour (2H) charts becomes critical.
The Problem of "Wicks": As you noted, a 15-minute or 30-minute chart can show the price briefly dipping below the central level, which can trigger panic-selling. This is often just market "noise" or stop-loss hunting.
The Solution - Candle-Close Confirmation: By waiting for a completed 2H or 4H candle to close, you get a much more reliable signal. If a 4H candle closes firmly back above the central level after dipping below it, it's a sign of support (always check the overall chart). If it closes decisively below the central level, it's a genuine warning sign that the bullish thesis may be failing.
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