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There has been a little discusion in chat about the worthiness of patterns for intra-day trading, all that I can say is they work for me.

Here is the chart:
Right click and open a new window to flip back and forth between the text and the picture. It's kind of squished but I wanted to put it all on one page

The following is what went down today and what I was looking at. The first trade was done pretty much step by step in chat, along with stop points, but the others weren't mentioned. What isn't mentioned much are the moving averages but I always watch these 3; 20, 40, and 200. Also, fib points aren't mentioned but I always have them running too.

The first thing was waiting for the set-up, always the hard part. The previous day I had made my plan, based upon the existing action and pattern, which led me to believe there would be an early rally to about $36.20 or so. Once the rally ensued it was just a matter of being patient and waiting for the set-up (and not letting the fakedown get ya'!).

Point RB starts the rally. From there a simple trendline follows the action up. About $36.10 (11:15) the price fell through the trendline and went sideways. No clear pattern existed yet and Elliott waves said we were in a 4, which means one more move up, so the wait continued. A horizontal resistance line was now drawn at $36.18/.20. 11:35 saw the price break through the resistance and head up.

About 11:45 ($36.40) saw the price making new highs but the RSI was not. The price was also just coming up to the trendline to give a KOD (Kiss of Death). There was also a weakening of volume at this point. A short was now taken on the pull-back from $36.41. Entry of ~$36.35 with a stop 1 tick above the high.

A diagonal down sloping trendline from the peak was now guessed at, which formed a decending triangle (Point A). A measure from the horizontal resistance line, which is now support, to the peak was taken and projected down from the support line. This gave a target of $36. The breakdown through support, or falling out of the triangle, confirmed the pattern at 12:16. The stop was now moved to even.

Prices dropped nicely to $36 and halted. The stop was lowered to just above the high from just prior to the breakdown point, $36.30. A slight rise in price with no volume ensued; a nice bear flag (point B)! Measuring from the high of the breakdown of "A" to the low of "B" gave the next measurement.

Once the break from the bear flag came, the previous measurement was projected down from the high of "B" to end at $35.84, the horizontal line at "C". The stop was now lowered to the high of the flag point. On the second bounce up from the horizontal line at "C" I took the exit at $35.90 (12:58). Notice the RSI showing a posative divergence now! Besides, it was time for a shower ( )

Got back about 1:55. Some quick lines showed a break out of triangle "C" at 1:30 and a measure projected up to exactly the peak of "LS". The drop from the "LS" peak looked like a bull flag so another measure was taken from the rally off of the down sloping trendline of "C" to the peak of "LS", and projected up from the base of "LS". The base point was now marked with a horizontal support line "D". The projected price was now $36.23.

Prices rallied up to and past the projected point. At the peak ~$36.29 prices fell hard and showed an RSI divergence. Went short again at $36.18 with a stop 1 tick above the high. Prices continued to fall back to the support at "D". A slight rally gave a 50% retrace of the fall from "H" and set up a nice H&S. Now a projection for the H&S comes in.

Measuring from "D" to "H" and then projecting this amount down from "D" (the neckline) gave a projected price of $35.84. Once the neckline was broken a cover order was placed for $35.87. Any advance would have been covered at even if a rally started. Again, notice the RSI at the cover point.

A nice consolidation occured now at "E". This was assumed to be the 50% point of a down move and a new short was ready at the button but the price needed to break the support at "E". Instead, prices rallied out of the consolidation. The top to bottom of "E" was measured and this was projected up from the top of "E". Prices soon stalled at the 50% point, where the RSI peaked and the 200bar ma interupted the advance.

On the down break of the 20bar ma (back through the support at "E" and a failure of the projection) a new short was taken at $35.95. A simple trendline lead to the close and a cover of $35.20. $1.51 for three trades.

The great thing about Q's is no stinking down ticks, shorts are right now! The other is that patterns work very well since the index is a compilation of tickers, not much chance for a surprise. That also means it's easy to get out without being wacked too hard if you are wrong.

Analyze this!
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