Enhanced Trade Selection
The SPX bull market top in 2007 was 2,757 CD`s from the 3/24/00 bull market top, and this week is 2757 CD`s from that 2007 top preceding the “Panic of 2008”, so there is certainly long term symmetry. The SPX made 2120 cycle high on 2/25/15 and made a 2126 intraday high on 4/27/17 before closing -0.4% at 2109.
There is a significant 8.6 year cycle date [M. Armstrong] in early Oct, and with or without the Fed there is no positive risk/reward in this market, and the only fundamental is how long the Central Banks can perpetuate the all-time greatest ponzi scheme in market history.
It would be redundant to say that the leadership in this Fed manipulated market continues to narrow, which is obviously negative as the major indexes continue to get muscled artificially higher. For example, the QQQ is +7.0% YTD, and was +4.3% last week, but most of that gain was driven by 4 companies: MSFT, GOOG, AMZN, and AAPL which accounted for about 66% of the QQQ +4.3% weekly gain.
However, the knee jerk daily reactions are enough to provide ample opportunity for the day trader, and that is enhanced by sticking to the basic strategy principals which many of you have learned in my Trading Service.
One important basic is that the probability of a successful day trade is increased when there is pattern symmetry with both the intraday chart and the daily chart, and further enhanced if there is also an inflection point in play.
For example, SLB was in a 3 day daily chart range on 4/15/15 at the 200DEMA inflection point, and also in a contracted volatility opening range setup on the 5 minute chart. After the ensuing B/O of the CV pattern, and also the 200DEMA, SLB ran to 91.95 trading above the 8EMA for a very profitable day trade.
There had also been a significant longer term RST reversal signal after SLB had declined -35.8% from 117.78 to a 75.60 low [see 1 year chart] The parameters of the RST strategy are well defined in one of my previous trading manuals, and you can identify this 5 point RST strategy preceding many significant reversals.