I want to show you how to use Hawkeye Pivots to manage congestion. The power of Hawkeye pivots and phantom pivots are shown here on the Emini.
Chart - Emini Daily
The cyan arrow is where I sent out a danger call on the Emini as there is no demand volume (white volume bar). This also came in with the market as per "6 Ways a Market Moves" going into congestion. So what do we do?
Correct! We look for the last Hawkeye pivot or phantom pivot high. This occurred on the first red down arrow, from where we draw the yellow dotted line. Now let's move forward. Look at the volume profile - its choppy, which is consistent with a market in distribution after an uptrend.
Understanding congestion exit is so important, as we teach in our seminars. Support and resistance lines are not rods of steel but elastic bands. See the second red down arrow, there is a close above the dotted line but the bar and subsequent bars all straddle the dotted line. So no breakout.
Note: the red and cyan arrows are placed for illustration only, and are not part of the software.
Learn to manage congestion using Hawkeye Pivots. When trading longer time frames always make sure that no part of the bar is straddling the support or resistance line. As I write, a pivot low could be forming on the daily, confirming more sideways congestion.