Dow (YM) Trading

Good luck on this play.

Looks like we are going to open down huge.

YM could open down massive.

However, if the INDU can not break 11500, I think going long the YM might be a good idea at that point.

Yet, IMHO we will blow right through 11500 after we test it one more time.
 
I am watching the 11,423 level today (if we ever get close) to see what happens. If this level reverses price, then I have a downside target of 11,797.

Good luck with your shortys. I am staying long for now.

The 12,675 level is the key. If this resolves and we move up, I think we will see new highs.
 
I don't trade based on patterns or indicators. I do keep an eye on a couple things on longer term charts just to be aware. Here is something I watch that might help you if you missed it.

Again, not a good setup to trade on at this time. In fact, just the opposite.


Pull up a weekly on the INDU (DJ or YM). There is a nice Head and Shoulders pattern. What I watch for is "FAILURE" of this pattern. It is a very strong indication of strength if it fails. I see some chance that the neckline could be re-visited somewhere around 12,850. There is a turn bar on the weekly and volume indicated very heavy buying at this point below the neckline to me. If the neckline gives way and price holds above, these can lead to some massive moves in the opposite direction. Fueled at the beginning by massive short covering no doubt.

In the last 10 years, there have only been 2 of these signals. One in Feb 98 that indicated a down move which essentially failed and one in Aug 2000 which led to a 4000 point move down. This is the first false H&S chance up in many years.

Again, just a heads up. You may want to use it traditionally and take it as a bear signal. Not me though. I am long into it.


False%20HS.PNG
 
No still holding long at 12,280 for the big move up. Also have some longer term positions on at 12,350 from Jan 17 or so.

Might need the gun though if the bulls don't win.

Quote from Compulsive:

Ypu need one of these :confused:
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