SELLING DAY WITH A TWIST 5/30/12

OK, we begin the day with a selling Range Run.  So far, not a bad day developing.  We had the ranges, we had selling PA.   We had price moving toward the BO-5 when fine when to bad.  Bad in the sense that the selling was in a B2 flag-channel up to the B48 area in the afternoon.  Whether bullish or bearish, these patterns are perhaps one of the more difficult to play.  The trash or thrash in PA  will stop you out, or push you out either by the move or the fear in a move.  There were some nice long and shorts available.  Knowing that does not provide console to many traders.

 By the middle afternoon we saw two head and shoulder patterns develop that were promising.  We had just added a comment in chat that (rather than a second push higher) PA was looking more like a rounded top H&S pattern.  The H&S prevailed.

 Rounded top type, with the second at a lower level suggesting more selling in a "M" pattern bear.  The shorting in this area is shown in this video,  Opinion, but the best trades are those PA moves beyond your targets, a guarantee for your exits.  Trying to time tops and bottoms, reverses, etc, for the maximum value will find you on the wrong side of a trade when your over confidence exceeds sound trading decisions.

http://screencast.com/t/1w6dxRUb