aarc's  Instablog

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  • A View To A Kill 0 comments
    Feb 20, 2013 1:24 PM

    Let's recap the last Instablog EWA for this Grand Struggle between the bulls and the bears:

    <- Weekly Bullish View: http://g14.picoodle.com/ltd/img14/5/1/7/aarc/f_141u_80f_ubk5c.png

    <- Weekly Bearish View: http://g14.picoodle.com/ltd/img14/5/1/8/aarc/f_141u_24a_ubk5c.png

    <- Daily EWA: http://g14.picoodle.com/ltd/img14/5/1/7/aarc/f_141u_469_ubk5c.png

    For the bulls SnP500 is now starting to break above the Complex Continuation Inverted Head and Shoulders which has a nominal target of 1718 and is therefore the entry point for those who prefer to enter on breakout(s).

    For the bears the expected 'false breakout' above the upper channel resistance started to happen yesterday and the expected breakdown started to happen today.

    Who's going to win? Nobody knows for sure.

    >> Weekly Bullish Chart: http://img15.imagefra.me/i52k/aarc/141u_163_ubk5c.png

    >> Weekly Bearish Chart: http://img15.imagefra.me/i52k/aarc/141u_e41_ubk5c.png

    >> Daily Chart: http://img15.imagefra.me/i52k/aarc/141u_3c4_ubk5c.png

    Obviously, there is no winner yet. However, the impending Sequestration Fiscal Cliff will be in March 1, 2013 and so traders will expect a protective sell-off is going to happen before that date.


    For trading purposes, this is the View for a Kill:

    > Intraday Trading: http://img15.imagefra.me/i52k/aarc/141u_395_ubk5c.png

    The Intraday 60min Chart clearly shows the Upper Wedge Resistance is the optimum entry for going short the SnP500. A breakdown below the Rising Wedge is considered another entry point for going short. For EW Analysis, it is better to wait for the b-wave up to make a short entry OR wait for a 1-2-3-4-5 run down to happen first then wait for an A-B-C pullback up to enter short.

    For the bulls who might want to keep chasing this rally, an a-b-c down, preferably near the Lower Wedge Support can be used as an entry for going long but be sure to use very tight stops since a rising wedge is considered bearish by the majority of traders.


    Trading Strategies:

    There is no easy way to trade this Grand Struggle between the bulls and bears on the medium term but for the short-term basis the better course of action is to at least try shorting the markets with protective stop(s) above the Wedge Resistance and then let's see how it goes.

    For me: I bought SSO last Jan 8, 2013 near the $62.38 bottom as indicated in the last Instablog of a shallow pullback down expectation with the gap up as a major support thus increasing my long positions from 115% to 120% with 90% as the Long-Term Portfolio with 30% short-term to medium-term trades. Right now, I am using a tight trailing stop for the 5% bought last Jan 8.

    For the short-term basis I will try to go short ES once an a-b-c pullback up happens either today or tomorrow on lower time frames such as the 5min or 15min charts - to protect at least 1/3 of my long positions.

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