Friday’s relatively quiet session introduces opportunity for Monday’s market, as these three futures contracts are poised for breakouts. Read more..
Inside Value Relationship
One of my favorite setups is the Inside Value relationship, which allows you to forecast when a chart is ready for a breakout opportunity…in any timeframe.
The Inside Value relationship develops when the Value Area (VAL to VAH) for the upcoming session forms within the Value Area from the prior session.
This relationship indicates that price is coiling and poised for a breakout opportunity. This relationship is heightened when the Value Area for the upcoming session is unusually narrow, too, as you’ll see in some of the charts to follow.
Crude Oil
The 15-minute chart of Crude Oil has formed an Inside Value relationship with a very narrow Value Area (red dotted lines). As you may recall from my teachings, a narrow Value Area forecasts a breakout/trending environment.
By contrast, notice how wide Friday’s Value Area was (blue lines), which led to sideways trading activity.
A breakout from Friday’s price range could offer key movement early in the day.
E-Mini Russell 2000
The 15-Minute Chart of the TF shows another Inside Value relationship that is poised for a breakout Monday. This VA is also very narrow…and formed within the much wider VA from Friday’s market.
Keep an eye on 830 and 820 for signs of a confirmed breakout opportunity.
Gold Futures
While not an Inside Value relationship, the 15-Minute Chart of Gold futures reveals an Unchanged Value relationship, which also forecasts a breakout opportunity.
An Unchanged Value relationship occurs when the upcoming VA is virtually unchanged from the prior session’s VA. This is indicative of coiling price action, which leads to breakouts.
Watch 1,580 and 1,595 for a breakout Monday.
Let’s see how these play out!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss
