RIGHT INTO THE DANGER ZONE

We did get the reversal bar up yesterday as I had commented I was hoping for, now what?

You can see my sell order resting in the market below the current price level. This is for today only and follows up on what I said yesterday, that I would sell below if we got a reversal bar up, which we did. I doubt this order will be filled, and there are not alot of other things I look at that tell me we are going down here today. It is a setup so the orders are in and I will also play the SH etf with it if it fills. As I have stated over and over, set your negative economic views aside. Right or wrong we have a major uptrend and the market does not care about anything else.

It is probably time for the Elliot Wavers to send out another email about the end of the world. This is where Macro views can mess you up with short term trading. You have to have the two come together to be successful. The problem is if you are shorting into this rally at what point do you say uncle? A 10% loss, 20, 30%, 80%? There has to be a trigger for entry and that also gives you a logical stop loss point. If you look at the chart it is just all higher highs and higher lows, so there is no bigger picture entry setup that I can see anywhere. I do state in here possible bigger picture things going on, and there are some right here, that could potentially cause the market some trouble. It is imperative that you understand that there has to be some shorter term evidence that ties the two together to take action. We have not had that yet.

These types of market situations are very difficult to trade because there are just no pullbacks at all. The only way you can do it is to just wait for the sideways ledges like what we have here to form. Then you buy the breakouts of them. I do not trade in that way nowadays, although I used to. It is a good way to trade because your stops are small and it keeps you in sync with the trend. Trend fighting can be a quick way to ruin if you are not careful. There are alot of markets to trade so my suggestion is trade something else instead of something that is moving like this. If you insist on trading this, trade with it not against it.

My short term trade above although not likely to fill, is probably a losing trade anyway so I would not be in any hurry to follow me in it. Why would I have the orders in if I think it is a losing trade? That is a very simple answer. The orders are in because it is a signal with my methods. I never know which ones will be any good so I trade the setups when they show up. Often trades I think are terrible become big wins and that is why I always try to discourage people from trading based on their opinion. I sure as hell cannot do it.

I repeatedly mentioned buying the dollar on a dip and below is a chart showing that we have rallied there. I did not get long on that dip because my patterns did not set up. No regrets but hopefully some of you made some money there.