5 Great Short Setups

The following short setups all feature one of my favorite short setups: consolidation post downtrend featuring a negative volume pattern (distribution). A continuation of downtrend is expected.VCLK, RS, SNDA, AMAG, ATK

Today’s Trade: SDS

I am shorting SPY using inverse ETF SDS. SPY has reached resistance and is very overbought. This is a recipe for a pullback, as it is very hard to make meaningful advances after a big run up and extreme overbought conditions. The trade is low risk and offers a decent edge.

Too Extended to Enter Longs

While them market is too extended for my to add to my long positions (report members know that I was long before the move using the oversold bounce strategy), there are some low risk short setups among inverse ETFs.

The Answer is Negative Divergence!

Yesterday I posted a chart of GS and asked what the chart tells us. GS is showing a clear negative divergence right at resistance. This signals a pullback at resistance, or if the R level does break, a pattern failure post breakout.Short entry can be made under R, or post breakout. As noted to Trade... Continue Reading →

RIMM Showing Bear Flag and Distribution

RIMM is at the top of my focus list for shorts. Notice the bear flag formation and bear flag that has formed under the 50 day moving average. The volume pattern is also showing distribution, with heavy volume on the recent drop.

Today’s Trades: FCX and MON

I made two speculative trades today, short FCX and long MON. MON is oversold, but still a few points from support. The higher probability setup is to enter long at $70, which I will do if I get stopped out of this trade. FCX shows a bearish pattern, but has bounced over the 50 day... Continue Reading →

Blog at WordPress.com.

Up ↑