Told ya so! Well that was pretty easy actually - There really isn't anyone around so the market goes down. I took trades in DHI and VRSN today both of them off a narrow range bar set-up early on and both of them proved profitable.
This set-up is a good earner. It is simple - a gap down followed by a narrow range bar (NR), confirmed on one of the next two bars with a hammer or hammer-like formation and then a buy on the breakout. I like waiting for a healthy confirmation but either of these trades could have been taken sooner. I use the lowest low previous to the NR bar as my stop.
You can see how both these trades ended with the market collapse around 1 P.M. I was watching them fairly closely and they stopped advancing well before I sold and I probably sold a few cents late but none of this is rocket science - you go in when you feel comfortable and you leave when the comfort leaves.
I like playing gap downs more than I like gap ups. I can play the gap up but only when the price pulls back to the EMA 8. The next time I get one of those trades I'll share it with you.
For tomorrow we are looking at a moderate start, a bottoming of the indices in the first 2 hours and then an explosive finish to end the day. I base this all on nothing more than intuition and instinct and we all know what that is worth.
The up/down ratio sits at 33% which is excellent - the new 20 day highs went down to 313 and the new 20 day lows went to 478 - a huge jump from 324. Unfortunately the 3 sisters all finished the day in the red. That is a weak indicator however the strongest indicator is the up/down ratio which is sub 40% for the second day in a row.
Little magic coin is 16 and 2 since it once again called today's action perfectly - for tomorrow it says ... tails - bear again. Ok - but I'm not betting the farm on it.