It is patterns like this that we must always be on the lookout for as they tend to offer a glimmer into the future direction of whatever vehicle you are tracking.
In this incidence the pattern is tracking equity prices and calls for the following:
A low to be made in the next 3-4 days at markedly lower levels then current.
A sharp 4-6 day reflex rally that retraces 50% to 62% of the decline.
Then another leg lower that measures larger than the first leg we are in now.
Keeping this in mind, we can adjust our trading accordingly and look for short term trading opportunities.
The main thing to keep in mind however is that the market appears to have entered a new phase of lower prices and long term investments need to protect their positions accordingly.
For those of you who wish to use the daily trading pattern for short term trading, here is the run down for FRIDAY:
The general tone should be down, with strong movements followed by sideways action.
Open to 9:35am - Slightly Higher (High for the Day)
9:35am to 10:30 - Sharply Lower
10:30am to 11:20am - Narrow Sideways Consolidation
11:20am to 12:00 noon - Sharply Lower
12:00 noon to 2:30pm - Wide Sideways Consolidation
2:30pm to 3:15pm - Higher
3:15pm to Close - Sharply Lower
AS ALWAYS, YOU WILL NEED TO HAVE SOME TECHNICAL CONFIRMATION AT THESE TIME TARGETS IN ORDER TO WARRANT A POSITION.
I USE THE 9 PERIOD STOCHASTICS WITH A 5 PERIOD SMOOTHING ON A 3 MINUTE CHART TO CONFIRM MY TRADES.
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