trap is similar to the "point of maximum optimism" setup that I have pointed out on several occasions here at Tradingview. There is essentially a heavy resistance area
that has set up at current prices where sellers have stepped up to the market and supplied all the bonds that the buyers could absorb. Note the dramatic declines off of extended advances. The "trap" is set up when the market creates an "up trending pattern" that essentially just brings the market back into the supply zone
, but gives the illusion of a new bull
market up-leg. Once this "last leg" is over, then the trap is set and a decline is underway with high probability.
Risk can be lowered to 2 average ranges instead of 3. Just my "sense" of the current situation. I will lower the stop to break-even after 5 trading days.
2:24PM EST, Tuesday, November 20, 2012