David’s Slingshot
David's Slingshot
This is a particularly egregious move by The Boyz, and the sooner you recognize it, the easier it is to avoid the pain of this Head Fake.
The overnight high takes out yesterday’s high in a sweeper move, then the market plunges to test the late low, threatening to fill the downside gap. The half gap is the first target to be expected, and the aggressive shorts enter there in hopes of filling the 90.5 gap and testing the previous 88.75 support.
When the 91 launch holds, and is able to take out the 03, it is a sign of strength. Only by violating the 97.5 pivot do the bears have a second shot.
This is a very difficult trade; some friends told me their gurus got them caught by shorting all the way up!
If all of this sounds easy to you, I can assure you it is not. You could tell it was a tough day for most because everyone was quiet and moody.
The T1 target was 917.25, and proved to be a good target. The 21 was also valid, but profit taking comes in eventually, and the 10.5 marker I had established in my mind was only broken by a point. Near enough for government work.
Falling into a rising up slope is destined to be met with buying.
I had the 908 as magnet support, and as noted, anything beyond the 12 was a bonus short side today.
Remember, many shorts were “trapped” and we suggested to think like the Frank Perdue trade: Buk,Buk,Buk.
I was thinking 890 to 910 possible range, but the market was “hot”, so that’s why we advised caution shorting at the 10 area. It could have worked, but I felt there were too many trapped shorts who didn’t believe in this bounce.
When you get closer to the weekly high, it is still not “safe” on a day like today, but at least yo can define your stop loss. As we noted, with profits and at the T1, it was an acceptable risk.
Why? It’s all about the risk and reward.
The Nasty One that gets us in trouble
David's Slingshot
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