BACK TO THE FUTURE
Of course I could have made that really obnoxious if I had made it Futures
One of the really cool features of software nowadays is the ability to project a bar into the future to see how things will look if a certain outcome takes place. I have done that above to see how my indicators will look if this little rally I called for happens. We are getting a nice rally today and unlike the other day when we had one that faded, there does not seem to be any intra-day divergences telling us this will fade. Watching how intraday moves hold or do not is one short term way of getting a larger picture guage of what the real underlying trend is.
I have labeled what would be a very nice sell setup for the SP 500 and also individual stocks above if we get the nice day today to stick and have another one up tomorrow. Will this happen, who knows this market is very weak internally right now. However, at the same time it is very oversold on a short term basis.
What this setup basically involves is a longer term momentum rollover combined with the first reaction against it. Many of us call this the lowest common denominator entry. This just means the first retracement against a new trend. They are the best and most profitable entries to try. You generally have close stops, and larger than normal gains on the wins. You have seen this in the metals trades I have done.
I was not able to find many individual buy setups in stocks so I only have one stock I am long unfortunately for today. So be it, I think the big money is going to be made on the next down leg anyway so that is what I am laying in wait for. It is entirely possible that we just rocket right back up out of this due to the commercial buying we have seen. I did go into detail as to why I thought this might be misleading a few posts back. If you have any interest in that logic, go back and read those posts.