A Decisive And Lucrative Trade
As I write this column
on Sunday evening, one cannot help notice that yet again the Asian
markets are under pressure as are the S&P’s. At some point you would expect a
bounce, today may be that day, like a stretched rubber band, eventually it snaps
back. This analogy is applicable across all time frames, from
HVT to weekly charts. A fair number of my
trades last week were in Newmont Mining
(
NEM |
Quote |
Chart |
News |
PowerRating)
under just such conditions. However, when the market puts on such a large
directional move in a very short time frame, the odds of a counter-trend bounce
increase. While this particular set-up is not HVT, it can offer a decisive and
lucrative trade.
You will notice the daily chart below of the
S&P’s that the 50-day EMA was broken on Friday, a bearish sign, however, it also
comes as the stochastics are getting somewhat oversold.
The same is true of the Dow and the Nasdaq.
A line has been drawn in the sand.
My focus, at least intra-day, continues to be on
the Gold stocks. Despite getting pounded with the market last week, they
continue to offer a few decent set-ups each day. Right now I see that
NEM has temporarily stopped the free fall
and it sitting right at a couple of key support levels and testing support from
back in early September with a severely oversold and sideways moving stochastic.
While I am not using the 60-minute chart to time
my entry, I am using it to “frame” the overall scenario and add some conviction
to the trade when and if it is placed. From here, simply refer back to a
5-minute chart to time the entries while using these key levels as potential
entry and exit points.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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As always, feel free to send me your comments and
questions.