DIA tracking the DOW widely in an ETF format on the two hour chart had a 7% rise in the
past month which was widely followed in the investment media. I believe that it was a bull
trap. In the past week price action has been sideways while the Stochastic RSI shows
bearish divergence as does the zero lag MACD. Tradign Volumes has fallen off since
burst of buying volume in mid and late November which pushed the price up 7%.
In the past week, relative volatility has fallen off in general and now negative volatility
exceeds positive. I believe that this is a top for the time being. A short position will be
taken of 10 shares with a stop above the top at 363 The target is 342 just above the POC
line, where high liquidity and volatility will return as long positions, would pile back in there
and get a bounce or even a squeeze. This would be about a reward of 8 for a risk of 2, which
seems reasonable. I will however take a 1/3 partial at 350 where the Fibonacci retracement
comes into play. The SDOW ETF would be another way to play this idea.
past month which was widely followed in the investment media. I believe that it was a bull
trap. In the past week price action has been sideways while the Stochastic RSI shows
bearish divergence as does the zero lag MACD. Tradign Volumes has fallen off since
burst of buying volume in mid and late November which pushed the price up 7%.
In the past week, relative volatility has fallen off in general and now negative volatility
exceeds positive. I believe that this is a top for the time being. A short position will be
taken of 10 shares with a stop above the top at 363 The target is 342 just above the POC
line, where high liquidity and volatility will return as long positions, would pile back in there
and get a bounce or even a squeeze. This would be about a reward of 8 for a risk of 2, which
seems reasonable. I will however take a 1/3 partial at 350 where the Fibonacci retracement
comes into play. The SDOW ETF would be another way to play this idea.