A TRADE COMING TO A THEATRE NEAR YOU
Here is a setup of a trade that I hope to make this coming week. Of course I have been harping on the bigger picture significance of this price and time zone. I have also remarked recently that the current trend was still in place so to be careful. Now we have entered into a situation where although the current trend is still in place, some of the entry parameters for a trade against that trend are now in place. I guess I am a reversal trader on some levels, although what I mostly try to do is position myself in the direction of where I think the next large move will go. At times this will be with the current trend, other times against it.
If you look at the momentum oscillators at the bottom of the page, they are now both under their trend lines indicating downtrends in momentum. We also have a pretty good divergence in the PRO GO OSCILLATOR ( the green line on the chart ). Now what I require is an upmove as indicated in red where the sell is written on the chart with the arrow. There is a certain pattern that is not shown here which is one of my main triggers, that should setup correctly on another day or two sideways to up here. Although the ideal would really be a false breakout to new highs and reverse immediately. This would trap alot of people. Time to watch closely each day now for an entry.
It is possible we just had a one day shake out on that extraneous event in Dubai, and if that is the case this will just rocket out of here to new highs and my pattern will not setup. If we start to drift sideways then the short setup should be there.
I am also watching Gold and Silver now for short entries, these markets are setup for historical declines now. The patterns are not quite there yet and may not setup. We saw a brief trailer on the upcoming movie, "The Fabulous Gold Meltdown" yesterday. The ADX reached 74 there the other day and there is also a Tom Demark Sequential sell pattern just completed. This market could not be setup better now for a large decline, I just hope I don't wake up one day having missed it due to a monster overnight move.