While all of your favorite "experts" called for shorts in the 9Ks, we explained to our followers that this is a location for potential long setups. How did we know? We didn't, because we don't flip flop over dramatic long and short "predictions". We simply evaluate PROBABILITIES and RISK. NOTHING MORE.
A probability is NOT a prediction. Predictions imply absolutes which often lead to inflexible, irrelevant and HOPEFUL opinions. Combine that without any regard for risk, and you have yourself a recipe for a shrinking account. What's worse is these predictions are backed up by complex visual arguments also known as chart porn. Since most believe more is better, they accept this information as credible (just look at all ch"art work" posted in the comment section.
THREE WEEKS ago, we anticipated a corrective consolidation off the 14K high, that came from knowing the rules and tendencies of . Since then, we have locked in a 1600 point gain on one swing trade, and have recently shared another off the 10,150 trigger. Not ONCE have we called for a short, and we average about TWO swing trades in this sector per MONTH. Since January we have a total of 14 trades and only 6 winners, yet our strategy has generated over a 10% return. I know its not sexy, but you DON'T have to be in every move to be profitable on a consistent basis.
WHAT MATTERS NOW: There are only TWO LEVELS we are watching. The 9750 support region and the 11600 to the 12300 . We have preset targets near this for our current swing trade. Why not 13K or 20K or 60K targets? Again we navigate around PROBABILITIES that are based on the proportions of recent price action. That is the defined scope of our trade. We don't gamble, or hope, or pretend. We observe, evaluate and adjust.
What if we are wrong and price generates a new sell signal instead? IT CAN HAPPEN. Since our objective is capital preservation, we have NO PROBLEM exiting the trade earlier for a small loss if price refuses to cooperate. Getting out for smaller than expected losses is how we manage to put together a positive return over time, NOT chasing profits. Profits are random, while RISK is the ONLY thing we can fully control.
In summary, although price action may appear confusing at times, the over all structure fits the definition of a Wave 2 corrective sequence. That is the context that shapes ALL of our choices, from evaluating the risk around our entry, to stop placement and predetermined targets. LESS IS MORE in this game, NOT VICE VERSA.
This process begins with a philosophy, NOT A CHART. Charts are a record of order flow. Order flow is an expression of the collective choices made by the market participants and is governed by sentiment. Once you ACCEPT this reality, you will be better prepared to extract real value from a chart, and no longer be distracted by the legions of chart pornographers.