WHEN THE PRICE IS RIGHT

EARTHQUAKES    TSUNAMI    BLACK GOLD    SILVER LINING

What a day!  Bears thought they had more than a bowl of soup when the market dropped another 10-12 points from the Thursday close.  Even the early news looked like it would help them celebrate.  But, as with the fairy tale, Goldie had a different plan.

The DJIA and the S&P reclaimed psychological levels of 12000 and 1300 respectively.  But the story behind the story is the heading above when you add some mathematical symbols.

EARTHQUAKES  + TSUNAMI   +  3% DROP IN OIL    =   SILVER LINING

At the 1280 area the price was right.  Bulls, after taking profits, were more than eager to buy again at the right price.  The difference?  The professionals were in at 1280-85 while baby bulls waited for the oil news, and the perceived value of infrastructure related stocks.

PRE-MARKET AND THE OPEN

[08:55] <Chartmaster> thanks  buyers entered at 80  they will work mkt 80-88    92-96  98-1300  not necessarily today  but near term

Maybe the outlook was a little tempered.  After all, PA had just hit 1290 (a +10 from 5 am est a nice run for any day) and retraced to 1285 with news seeming negative for another day.  Our first trade was a short at 85.5. However, there was an interesting pattern on the range chart that was intriguing.

We had a range bar gap in our short hold, with a HL TL scenario setup as well.  Take the profit and play the long setup.  When the setup is bold, trade bold.  Those two entries alone established a +7 advantage at the market open.

One note, in a trend day there will be additional opportunities on quality pullbacks.  B20 and b30 were those ops for the long side.

Short ops come when weakness is noted.  If your going to CT trade, there should be cross confirmation in your charts.  This short had the range, 8m, and 3m reading short.  Additionally, the 3m was showing a divergence.

The preference is to be in and out quickly, as events can change the market. But some trades will require patience as they develop.   If you take some profit off and move your stop into profit, the balance of your trade is running in a win-win trade.  A PA-1 point stop can help maximize the trade potential.  Again, no one knows the top nor bottom.  You are not expecting to take all the profit in a run.  Attempting to do so lets

greed override a balanced approach to trading.  Managing the trade allows you to profit and be on the watch for another trade.  As our short began to fade, a long opportunity was seen.

Price held at the ema for the range chart, and we had a TR on the 3m.  Together, these signals provided another positive trade.

That's a quick look at  4 of our 7 trades today.  Join us at Othernet Mirc  at #chartmaster to learn more about out methods, and join our discussion of the setups and trades with more screen shots.

Have a great weekend.