The Right Edge

Mark Reid Author is a PRO member Rank: 77 Followers: 9 Votes: 7 Years Member: 0 Last Update: 12 February 2016, 17:35 Categories: Trend Analysis
Market Breadth Analysis
Chart Patterns

Our approach:
1) Never trade against the 5 day moving average.
2) Look for full time frame continuity across multiple time frames. I.e. The weekly, daily, and intra-day charts all have either a bullish or bearish bias.
3) Wait for counter-trend moves in the fast stochastics, preferably in the overbought/oversold zones (30 minute time-frame) to enter long/short- this allows for tighter stops and higher risk/reward trades.
4) This technique works well in strong trending markets. As with most systems, this will not work in sideways or choppy markets. We rely heavily on the slope of the 5 day MA. Flat to slightly rising/falling 5 day MAs should be treated as neutral.

2/7 Weekend update: We have full time frame continuity right now with SPY showing a bearish bias on the weekly, daily, and 30 minute time frames. With the 5 day moving average just now rolling over, we believe it is still early in this downward move. With the 30 minute chart reaching oversold levels, we are looking for an opportunity to sell into any strength. We will look for the fast sto to rise above the 50 level, hopefully reaching the 80 level before crossing down. however, we will begin entering short positions on any sign of weakness with the fast sto above 50. NUGT was a great trade for us, though we exited too early. We would not recommend chasing it at these levels, and wait for a pullback to take another long position.

Trade alert: 1/28 We took a starter position in NUGT this morning at 24.17. More on this later.

Commentary: 1/28 Midday update: Choppy action continues in the market. Market is rewarding patience and holding cash. NUGT trade is alll we are long right now and has been working out well so far. The SPY is at an interesting spot right now. It has reclaimed VWAP and the 5 day moving average. We are not going to chase it here, but would like to see a pullback to 189ish, where there is a confluen

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