Friday, February 24, 2012
Tuesday, February 7, 2012
Explanation of Trade Entry and Exit
Entered long trade for the following reasons:
- 50% retracement of Fibonacci Fan from Friday's high to yesterday's open support line was hit.
- 5-min %D Fast Stochastic (%K Interval: 30 periods, %D Interval: 6) for SPY = 10, which is very oversold short-term
- 1-min SDS %D (short SPY ETF) Fast Stochastic (150,30) > 90 which was well above NYSE TRIN Index of approximately 75 at the same time. This is a bullish divergence, reflects the fact that selling of the market (advances/declines, weighted by respective volume)
Closed long trade for the following reason:
Targeted a quick 4 point move, expected a pullback, but the market has continued to surge higher...we hit a prior day support line which made me exit this trade prematurely, but it is a nice profit!
Monday, February 6, 2012
Explanation of Trade Entry and Close of Trade
Entered the short position for several reasons:
- 15-min Accumulation/Distribution (A/D) Line: showed a bearish divergence -- higher closing price on SPY was NOT matched by a higher A/D Line value
- 5-min chart, % D Fast Stochastic (% K Interval: 30, %D Interval: 6) hit a reading of 90, which is "overbought" short term
- 5-min chart, % D Fast Stochastic for SPY > % D Fast Stochastic for IYT (Dow Transport ETF, a good leading indicator of market direction). This is a bearish divergence.
- NYSE TRIN Index Stochastic > SDS (inverse bearish ETF on SPY). This is a bearish divergence for SPY.
Covered for the following reason:
- As market traded off, TRIN Index Stochastic did not move with the sell off...that is a bullish divergence, short-term.
- TRIN Index MACD Histogram readings continue to decline, which is bullish for SPY
Conclusion: Turned into a very short term, but easy, profitable trade...will never go broke taking a profit!
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