Wednesday, April 7, 2010
What to expect for today/tomorrow
Topping process to me seems to be so tasking where bottoms are very sharp. The market has to roll over and make little bumps testing the convictions of the bear. As I ponder the meaning of life... I mean the process of the topping madness. It has made my convictions of the broken divergence even stronger and why not to make any stops in a trade rather baby-sit the trade and exit based on the divergence break. For me that is like taking out the chatter of the small noises of the market and listen to the true conviction of the market movers. Here is where we are today (see chart below) where at a point where bearish divergence was almost broken yet not enough to break it. In a bear play, your profits are very fast but you have to hold through the topping process that can drive you crazy. This trade system "Divergence Trade of 3's" takes this topping process to an exact rule to when to losing trade... (well in the process, still have some exact rules to define here). Nonetheless, in every move forward or down a new smaller battle exits to decide the next move down. I believe were living in the 1-15 minute charts now and we have not strong bearish convictions left until we take down this Bullish trend channel from the 30/60 minute charts. So, here ya go here is out baby-step battle today/tomorrow. Daily chart is still showing bearish divergence so the short trade is still in play.