Here is a snapshot of a blunder I just made where I went long the SP 500 and was very bullish on stocks, then had a change of mind overnight when I looked at additional things. I then pulled the plug too soon on this trade. What mostly fooled me was where I have "tricky" on the chart. This was a momentum pullback to the trendline which was going up. Projecting the next bar the day after entry if we had gone down showed it going down below the trendline and with the weekly picture which I will show in a minute, I judged we were in a sell zone not a buy zone. Obviously watching this begin to accelerate again on light volume, tells me this was a bad decision. Price in the end rules the day in spite of all the fancy things we can come up with to try and tell us where it will go next.
You can see on the weekly chart the serious divergences with the green and purple lines which are Larry Williams Progo and POIV respectively. POIV in particular rarely diverges like this. All else being equal this would be a major red flag here. Also you can see that the momentum indicators at the bottom are both clearly showing a retracement in a downtrend in momentum. Price gives us a different story on the daily chart. However, some of the best entries for bigger moves are when you can fade very strong momentum on a daily chart in favor of the higher time frame weekly direction.
These are the reasons why after I entered this trade and rode if for a day, I said OOPS even if this keeps going this is not a good probability trade. Of course what I failed to take into account was the PPT. Now that we have the volume dropping off again, they can push this to new highs again without too much of an effort. I cannot for the life of me no matter how much I know this manipulation is happening, just blindly through all of my trading principles aside and get heavily long.
So for the time, I sit this one out and watch the liftoff with no regrets. I know if I buy into these types of scenarios that most of the time these trades will be losses. The markets are very difficult here the last couple of weeks, I am not exactly sure where we are going. It appears to me that we have sells setup in alot of places, but price is chopping sideways in most things at the moment, so I do not have any entries pending other than a short in the Dollar today if we break down there.
Sorry I have not been posting as much, my personal life with all my animals on my ranch has just been so hectic I just run out of time on some days to do this. I now have 6 Saint Bernards we have rescued and they have varying degrees of health issues we are dealing with right now.