There is a positive divergence happening on the daily chart which could be a clue for an eventual turn up if it hasn't happened already. But this should be a cautionary setup since we are in OS territory, My plan of attack for myself is to let the rally do its thing, and sit it out. I know some will have that itch to trade for a potential burst up. This from my experience has never been a good plan since it is a counter trend trade. In a normal day where signals are bullish or on an uptrend, you can say that trading the short term move up might reap benefits. But in this case, we are faced with risk of downward acceleration and run-away gaps. This leaves many not ready for the scenario I just mentioned and have not thought about which levels to cut their losses at unless you have an auto stop-loss set up, but this also is no use if prices gaps down below your cut loss level.
Below you will see on the 5 min. chart what our trend is and where these acceleration and gaps occur.
We might be turning by tomorrow, and the pos. divergence could be a true signal, but we need the ST and PA signals to confirm this, and avoid potentially losing out on some short profits for those who are short the market.
SEN: BEARISH
ST: DOWN
PA: DOWN
If those new to my blog, want to know how reliable our signals are.. Just look to the right side pane of this blog and you will see when our signal turned "Bearish". Trading bearish from that time on without trading the corrective rallies would have made you a good chunk of change.
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