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Paul Mosgovoy
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Truth is timeless: “Markets never change” – Jesse Livermore, 1923 The early masters, Livermore, Wyckoff and Loeb isolated themselves from the crowd and crowd thinking. None of them ever graduated high-school and yet they each became legends in the market. Their techniques have been time-tested.... More
  • IWM Continues To Say "Short" 0 comments
    Nov 1, 2013 5:41 PM | about stocks: IWM

    Yesterday, we provided three separate updates (early, mid and post-session) highlighting the potential shorting opportunity in the iShares Russell 2000 ETF (NYSEARCA:IWM) or conversely a long opportunity in the Direxion Russell 2000 Bearish 3X ETF (NYSEARCA:TZA).

    What appeared to be a completed throw-over in the wedge formation shown below was identified. The implications were that the upward move was at an end and it was time to sell or sell short.

    The chart of IWM below shows the progress thus far:

    (click to enlarge)IWM Daily Chart

    Charts by

    As can be seen from the chart, the probabilities at this point favor a continued move lower.

    The rising wedge pattern is a well known classic termination pattern and price action entry back into the wedge (after a throw-over) is the sell signal.

    To us, today's large down volume on the chart is ambiguous. Price action has stopped at support and the volume has increased substantially.

    Our take from looking at today's volume is that whichever way the market heads from here (breaking higher or lower), the area around today's close will either be significant resistance or significant support.

    The data thus far favors a break lower and is indicating to sell or sell short the IWM.

    Please note however that the lowest risk opportunities to enter short IWM (or long TZA) have already passed.

    A position established yesterday (or before) has some amount of protection built in as there would need to be a significant push through several established resistance layers to get to the stop.

    We are long TZA with a stop at 20.23.


    This report is for discussion purposes and contains our opinions only. This posting is to publicly document our thinking and market analysis actions within the Three Ten Trading entity. The data was obtained from sources believed to be reliable. However, we make no guarantee as to the accuracy of that data.

    Investing or trading in equities, futures or options may result in a significant loss of capital, total loss of capital or a loss greater than available capital.

    We are not advocating any stock or in any way offering portfolio management advice or stock selection service.


    Paul Mosgovoy, President: Three Ten Trading, LLC

    Thank you for reading.

    Disclosure: I am long TZA.

    Stocks: IWM
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