The broad averages have spent most of July screwing the pooch. Although the shallow feints south over that time might look like a tedious consolidation on the intraday charts, there’s an equal chance that it is actually a bearish distribution. I say this because all of the sideways scuddling has occurred just shy of the rally target of the large ABC pattern shown. That is bearish on its face. Under the circumstances, we should look for shorting opportunities at these levels, since the Dow is positioned to fall without warning to 15363 (see inset) if it breaches that number’s sibling midpoint support at 15462. Specifically, I’ll suggest bidding 0.12 for 32 DIA Sep 140-135 puts spreads, good till canceled. If you can leg it on for 0.10 or less, double the position size to 64. Please report any fills in the chat room so that I can establish a tracking position for your further guidance.. Click here to learn how you can reduce entry risk by using the ‘camouflage’ trading technique.
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