Homework for Monday 2008.11.24

23. November 2008
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ESZ8 - We are now back into the daily pitchfork (blue lines), so we may see more of a bullish move from here.  Also, we have the existance of our proprietary "False Bar Ultra" arrow showing a counter-trend "buy".  However, we are in a bear market, so we must initially look to short the rallies!  Just in case, we have two scenarios:

  • Short 825, target 808 (785 is the bottom of daily fork).
  • Long scenario - If 825 does not break hard, we could be looking bullish.  If we get to 835+, look for a move to 865 (marked, red line on chart). 

15:01 CST Summary - 825 short area initially ignored, went to R2 (841) area and retraced back to 825.  After 3-4 hours of sideways (with an upward bias) movement, we get to 865 and have a hard break down to 840 (then settling at 850 area)! 

Lessons - 

  • The day rarely plays out like you think (the time and momentum it takes to get to levels, order of levels, etc), even if you are right about the major levels.
  • When a sweet spot is a particular resistance level and if that sweet spot is ignored by price action (goes against you significantly), look for a return to that level as SUPPORT (duh) for a move in the opposite direction.

 

Homework

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