Today, as expected, was a pause day on the market. The indices were up a fraction of one percent. However, the Russell 2000 ($RUT.X) again led. TNA paused for approximately 20 minutes, and then turned up to continue walking the upper Bollinger band.
Positioning in TNA should have been accomplished shortly after the price completed the early morning sell off of profit takers. This was indicated after the 3-minute graph showed a higher low. A stop loss could then be placed immediately under the dip, keeping one’s reward:risk ratio well within the 3:1 requirement. Approximately six minutes later volume came into the market showing others were waiting to see if the profit takers were exhausted or overwhelmed by buyers. They were.
As long as the daily prices continue riding the upper Bollinger, all is well, and the position should be held. The stop loss can be moved up to just under the daily price range, should one wish to capture short-term profits. One of the best ways to tell the run is exhausted is to watch the lower Bollinger band. Upon a new run, it moves in the opposite direction as the upper band and the price reflecting the increased volatility. It will begin to turn and follow the upper band when the pace of price appreciation slows. For the moment, all is well.
------------------------------------------
The top performers today included numerous solars and FAZ. FAZ, being the mirror of FAS, shows the decision to at least temporarly abandon FAS was the correct decision.
No comments:
Post a Comment