ANOTHER HEAD FAKE

Yesterday provided yet another spectacular bear trap for many of us, and I say us because I got burned. There have been several of these in the recent spectacular bull market run in stocks, but this one really was a beauty. One of the things you just have to accept as a trader is that when you trade against the trend even on the entries that appear great, many of them do not wind up working out. My DX trade had over 10k in open profits at the close, but I wound up exiting on my trailing stop with just about a grand or so. I have to admit I really thought we were off and running on a short squeeze there but it was not to be. Better than a loss I suppose. Crude Oil turned out the same, a complete wash out down yesterday leaving me with about 4k per contract in open profits, Poof this am, wound up with about a grand there also.

I knew when the PPT rallied the indexes sharply in the last few minutes of trading yesterday, that trouble was likely brewing for today for my trades. When stocks rise now so does everything else except the dollar and bonds. However, you just never know so I left my stops in just in case I was wrong. I am really trying to ride things longer now, so this is what comes with it, alot of one day wonders that wind up as small wins. I could have easily taken quick profits, but in markets with these monster trend moves we are getting now, I think we have to go for more nowadays.

Above, we might finally have the world's favorite market setting up for a short entry in a few days. The short term trends have turned down, now what we need is a price rally for a few days so that we can enter on a reaction to the new short term downtrend. We might just fly right up out of here, but so far today with the huge stock rally, Gold is really lagging, which it has not been doing in recent days. Also, in spite of the DX wipeout today, that market still appears to be bottoming here. That does tie in to a GOLD short, so it all fits.

It also appears to me that the Bond market is now setup for a short entry tomorrow. See the chart below, a reaction up for 3 days against a down trend. I will be playing this one.

I have drawn in what today looks like, I am having internet issues again due to the rain here in San Diego. Whatever entries any individual might use is up to them, but this is setup for a decline. I am also looking at the Cotton market on the short side, and for the DX to setup another long entry in a few more days.