The ER2 Trading Journal

[trade_4_living]

ER2 chart:

 

[trade_4_living]

CCI and Zero Line Rejection.

 

[trade_4_living]

long-term MACD liine again wraps the short-term MACDs.

 

[trade_4_living]

Looking this YM's one year chart, it made a similar move last year like last week, however, it started to move up on Dec 6th when it touched the 34 EMA. I see the 34 EMA for DOW is around 10720 and 20 EMA is at 10790, DOW is becoming bearish.

The short-term MACDs are crossing through the long-term MACD like last year:

 

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Last year around this time, YM went down 200 points (from around 10650 to 10450) before making an upside move.

 

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YM's CCI14 is about to reach the zero line rejection, 100 points drop from this level will do it.

 

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Trend indicator (ADX) shows YM is at extremely overbought condition, it is just the opposite of April 2005, where YM was oversold:

 

[trade_4_living]

YM - 10760 to 10740 appears good entry area, 38.5% retracement is at 10700.

 

[trade_4_living]

ER2 has no sign of overbought, though it is trending up, but ADX line is not at the very top like YM. Right now it is at 1.27% fib extension from the last bottom. If it goes up, next stop appears at 697.6 (1.618% fib extension).

 

[trade_4_living]

ADX line - compares to the same time last year:

Looks to me, to maximize the profit, the strategy is - if the market goes down, short YM, if the market goes up, buy ER2.