Dow Jones short opportunities (round 3)

Updated

Quick analysis for the weekend.
I'll be entering short positions on DOW JONES as stated on the right side of the chart, targets and stops in place. The trades are at the far right just to keep the chart as clean as possible.

Why? There's several things pointing towards similar levels

Bearish white swan starting at as low as 24400 levels
Several extra bearish Gartley derived harmonics, levels at 24800 until 25300.
Volume profile congestion levels from DJI coinciding with the trend lines and possible price timing.
Breakout up distance from lows (if a breakout up from red line is confirmed)
Old trend line retest at highs (orange)
Overbought situation based on average weekly range (red cloud)

Things to bear in mind, or potential risks:

Manage your position sizes according to the stops I provided, this is highly speculative so make sure it fits your trading risk profile.
VIX has peaked to the downside, this SHOULD be monitored before entering any short.
10Y treasuries yields has made a new high on 04/25, seems like that level is a trigger, so keep an eye on bonds too.

I'll be following this idea up as the week progresses.

Good luck!

Trade active

First one, active.

Cheers

Note

So far so good. We'll see if there's opportunity to move stops to BE and manage this first trade, on profit and at no risk.

Note

Moved stops to BE, free risk trade. Let's see if volatility increases a bit. It is taking longer and I think this might turn into a breakout up if time keeps passing by at these levels...

Note

Stopped out in a small profit... will consider reentering but not for now.
I need confirmation, i'll keep monitoring the PA.

Note

Bearish cypher formed. I reentered short. Tight stop.

Note

Stop moved to BE again, let's see it this time it breaks down, risk free.

Note

Stopped out again at small profit. It is apparently a breakout up. So now waiting mode.
For the 2nd and 3rd positions it is important to keep an eye on VIX for confirmation first. If vix is going down and DOW gets to those levels slowly and steady, better to keep out.

Trade closed: stop reached

Stop at BE

Note

Ok, VIX keeps going down. We had a breakout confirmation.
We are currently approaching the next congestion zone coinciding with the harmonic.

Once I get to see price ranging at those levels i'll evaluate shorting at those prices.
Remember there should be huge resistance at those levels.

Cheers!

Note

It is apparent that the climb is steady and VIX is slowing down heavily.
So, i'd discard second trade and look for the third in order to be safer.
At 25k level the movement should show signs of exhaustion in my opinion but we'll see.
Nothing to do for now. Will keep you posted.

Cheers!

Note

Waiting for 25200/300 zone.

Trade active

Third trade active, shorted at 25300

Note

Third trade looking good. Still i'm not moving stops to BE yet.
I will wait for another leg down for confirmation. at this level moving the stop to close to current action will mean a decisive stop out.

Note

Huge profit on this third one. Moving stop to BE.

Note

Taking partial profit here, huge profit.

Note

Remaining order seems to be in good shape.

Trade closed manually

Well, isn't this just beautiful?

Almost there on target, feel free to close it by now. Gorgeous profit in any case.

Enjoy!

Note

Second target, touchdown!

Enjoy your profits

cacus

Also on:

Related publications

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.