The higher low formation that materialized in the 11600 area has lead to a new swing that has quickly worked its way near the 16350 to 17876 which is the current .618 relative to the recent structure. On top of that, price is currently sitting on the upper boundary of a minor reversal zone that is projected from the 11600 low. Even though there are no reversal signs at the moment, this is an area where selling is more likely to appear.
On the more side, price has taken out the 14250 decisively which signals that the previous momentum is much less likely to lead to a retest of the 11K lows. If price decides to retrace from the current area, it is more likely to find support around 14300 level (.382 of recent swing) or the 13270 to 12500 area which is relative to the .618 of the recent swing. Any retest and reversal off of these support areas are where reward/risk are most attractive compared to where price is now in terms of my swing trade strategy.
Measuring risk in this market is very dependent on what you can afford since the small movements are hundreds of points. If you are going to use a stop, it has to be wide, and that is why under these market conditions, I think it makes more sense to start with smaller positions and build them as the market moves favorably and taking profits along the way at the predetermined levels IF your outlook is short term. All of this must be figured out BEFORE you take a trade.
Being flexible and open for anything means you are open to listening to the market, not fighting it. For whatever reason, IF price breaks below the 12500 level again, that would open the door for a retest of the 10K lows and offer more attractive investment opportunities. Navigating these markets is not about "predicting", it is about adjusting and interpreting new information as it becomes available while comparing it to a predetermined scenario(s) originating from information available at the present time.
In summary, timing short term trades in these markets may seem less effective when prices are moving in vertical lines. The thing to remember is "vertical moves" are far from the norm and low probability. That means the people who start out in the green simply because they bought into this market blindly will have to face sharp corrections just as randomly while the informed trader is prepared to capitalize on such extreme scenarios. The same impulsiveness and impatience that drives the inexperienced investor are the same forces that build opportunities for those who know how to wait, even in the face of markets that look like they are going up forever. Stop giving into the impulse of greed, and learn to wait for the market to come to you. People who were buying at 18K, expecting 30K had to watch a retest of 10K instead. That cycle is nothing new and will repeat itself again and again while varying in magnitude. Learn to wait, or at least manage risk in ways that allow you to capitalize on extreme moves rather than be hurt by them.
Comments and questions welcome.