Friday, April 9, 2010

The Ever Lasting Triangle!

(Updated count = Last chart) Looks like the bulls are getting every last drop of this triangle they can. Very dangerous to be long here in my openion. I had to change the counts to accomidate the new high today. We still have a little room left for up movement to hit the top of the triangle, but not much. Indicators are still showing solid bearish divergence so the short position is still safe even though i'm now down almost 4% from the SPXU trade. When this tight channel does break I will get that back very fast. This trade is not working out as I hoped but is still in-line to the hold of a losing trade. I'm a firm believer that stops, though very safe, will often make you exit when you shouldn't. The only way to use a stop in my system is to guess what number would force a break in bearish divergence and that is hard to do. If it moves up fast indicators will break the divergence where if it creeps up it will not. Here is a look at the daily and how crazy this last run really is. Bulls are playing with fire here.

Here is a zoom into the last high with a micro count. It's funny this is almost exactly the same formation that I was playing out in a worst-case senario winning trade playing off of divergence break that never happens. I will post that chart after this one.

and here is my test chart that I have been working on.

Updated Count

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