I continue to cobble together a trading system that will help me let my winners run while finding potential reversal points as I have gotten fairly good at buying the dip or finding longer term reversals but I leave to much on the table or I get out too soon. So lets break this down:
The VSTOP system is pretty simple. The regular setting helps track areas of support and resistance and you can look at closing a position when it flips. When it does flip you have a secondary back up at the Multiple Time Frame VSTOP. Often you can get quick movements from the VSTOP to the VSTOP MTF. The current target for that move would be around $121.
The On Balance Volume EMAs is one of my favorite indicators. Like many indicators it is a bit easier to but the dip than it is to short the top because of how difficult shorting can be. The purple circle does show an interesting consolidation below bearishly crossed 10 and 20 EMAs just above the 100 EMA. Should we get the expected move off the VSTOP the OBV situation would probably drive OBV below the 100 EMA and single worse things to come.
Further that: the OBV showing hidden bearish divergence peak to peak as shown by the red arrow. That is very crucial and the OBV beneath the EMAs shows a lot of weakness.
The blue circles on the MACD show that we have a very similar bearish cross compared to the black squares and purple circle. The MACD has a potential to cross zero and the MACD histogram is showing classic bearish divergence. Somewhat painfully for me is I know uptrends often have three highs (simple elliot wave) and the MACD helps show us where those highs are technically. I shorted the second high poorly.
And finally, the 20D SMA is in a position to act as resistance.
Based on this system I am cobbling together we could short and place a stop above the VSTOP and either take profit at the MTF VSTOP or look for a fib retracement of this uptrend. You could also zoom out and look for a wider support.
If the price action breaks the VSTOP bullishly the setup is negated. If the OBV EMA situation is no longer bearishly stacked the setup is negated. If price action goes to the MTF VSTOP then bounces up the trade is just a swing trade and not a longer term trade.
The VSTOP system is pretty simple. The regular setting helps track areas of support and resistance and you can look at closing a position when it flips. When it does flip you have a secondary back up at the Multiple Time Frame VSTOP. Often you can get quick movements from the VSTOP to the VSTOP MTF. The current target for that move would be around $121.
The On Balance Volume EMAs is one of my favorite indicators. Like many indicators it is a bit easier to but the dip than it is to short the top because of how difficult shorting can be. The purple circle does show an interesting consolidation below bearishly crossed 10 and 20 EMAs just above the 100 EMA. Should we get the expected move off the VSTOP the OBV situation would probably drive OBV below the 100 EMA and single worse things to come.
Further that: the OBV showing hidden bearish divergence peak to peak as shown by the red arrow. That is very crucial and the OBV beneath the EMAs shows a lot of weakness.
The blue circles on the MACD show that we have a very similar bearish cross compared to the black squares and purple circle. The MACD has a potential to cross zero and the MACD histogram is showing classic bearish divergence. Somewhat painfully for me is I know uptrends often have three highs (simple elliot wave) and the MACD helps show us where those highs are technically. I shorted the second high poorly.
And finally, the 20D SMA is in a position to act as resistance.
Based on this system I am cobbling together we could short and place a stop above the VSTOP and either take profit at the MTF VSTOP or look for a fib retracement of this uptrend. You could also zoom out and look for a wider support.
If the price action breaks the VSTOP bullishly the setup is negated. If the OBV EMA situation is no longer bearishly stacked the setup is negated. If price action goes to the MTF VSTOP then bounces up the trade is just a swing trade and not a longer term trade.
Comment:
NDAQ appears to be in a descending triangle and the volume situation still looks very bad for buyers. The OBV is looking like it is on the verge of rejection at the 100 OVB EMA and that should complete the triangle break to the downside. Under normal circumstances a 5% dip isn't a bit deal but these are not normal times and so we will have to see how the market responds.
And I promise every Floridian that you will all be rich... because we're gonna print some more money! Why didn't anybody ever think of this before?
~Nathan Explosion
~Nathan Explosion
