Looking to short the DOW ??
Updated
Hi Guys,
The US Indices continue to soar higher and higher without looking back.
A correction is long overdue and I believe the area Ive highlighted in what looks like a messy chart could be an area where some good selling opportunities may arise.
I've used Fib retracement and trend based fib extension tool to determine the area that is highlighted with the orange box and labelled optimal trading zone.
1. Covid Low to Bear market high extends 1.13 to that area.
(Not the conventional way to use this tool but I do just a direct extension of a measurement)
2.Bear market high to bottom extends 1.27 to that area.
3.Trend based fib expansion of March 23 low to July 23 high to Oct 23 low extends 161.8 to that area
4. July high to October low extends 2.0 to that area with the
1, 2 and 4 I have used the retracement tool and 3 the trend based extension.
The measurement I use initially is the retracement extension of bear market high to bottom which saw a bit of resistance for the dow at 1.13 and obvious next likely resistance would be the 1.27. From there I have used the fib tools to measure other important high to lows or trending moves and see how many of those measurements land in the same area and on this occasion four really important fib level/ measurements land in roughly the same area.
The 1.13 of bear market high to bottom is currently where the Nasdaq has seen some selling and where the SP 500 is very very close to (likely to hit that mark and the $500 mark this week).
I have no idea what sort of pullback we get here (if we do at all), but historically these levels have provided good shorting opportunities on lower time frames and buying opportunities at previous resistance.
Please ensure you use sound risk management if you decide to trade using this idea, especially trying to sell in what is a very bullish price action at the moment.
Hope this info is useful.
Safe trading all.
The US Indices continue to soar higher and higher without looking back.
A correction is long overdue and I believe the area Ive highlighted in what looks like a messy chart could be an area where some good selling opportunities may arise.
I've used Fib retracement and trend based fib extension tool to determine the area that is highlighted with the orange box and labelled optimal trading zone.
1. Covid Low to Bear market high extends 1.13 to that area.
(Not the conventional way to use this tool but I do just a direct extension of a measurement)
2.Bear market high to bottom extends 1.27 to that area.
3.Trend based fib expansion of March 23 low to July 23 high to Oct 23 low extends 161.8 to that area
4. July high to October low extends 2.0 to that area with the
1, 2 and 4 I have used the retracement tool and 3 the trend based extension.
The measurement I use initially is the retracement extension of bear market high to bottom which saw a bit of resistance for the dow at 1.13 and obvious next likely resistance would be the 1.27. From there I have used the fib tools to measure other important high to lows or trending moves and see how many of those measurements land in the same area and on this occasion four really important fib level/ measurements land in roughly the same area.
The 1.13 of bear market high to bottom is currently where the Nasdaq has seen some selling and where the SP 500 is very very close to (likely to hit that mark and the $500 mark this week).
I have no idea what sort of pullback we get here (if we do at all), but historically these levels have provided good shorting opportunities on lower time frames and buying opportunities at previous resistance.
Please ensure you use sound risk management if you decide to trade using this idea, especially trying to sell in what is a very bullish price action at the moment.
Hope this info is useful.
Safe trading all.
Note
Also a bearish butterfly (not the exact fib measurements) lands 1.27 entry in the area.Volume has been very low on the move up indicating that the move up is not being supported by big institutions. ( I am not sure how accurate this point is but usually a move up in low volume sees a very dramatic drop).
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