$SPX - remember the market isn't going to
go straight down, you always get an oversold bounce to get it
overbought on the 60 min charts via the Stochastics over 80%.
For example, even for a corrective pullback, short the wave B
bounce. Here's the SPX chart from early 2011, while I don't expect
it to repeat eactly like this, something similar would not surprise
me. In 2011 the SPX had a 3 week 7% correction.
A Corrective move low would be an ABC move, therefore short the
wave B if you are not short, don't chase it short now. Even
under a bearish scenario wave 5 trend starting, you would still get
a wave 2 oversold bounce. When shorting, short into oversold
bounces, vs shorting breakdowns
I watch both, it depends honestly, many times the 60
Stochastic wont't get overbought in a good downtrend. the
14/3 Stochastic on the 60 min is still a much better risk/reward vs
shorting a breakdown because you are shorting overbought
conditions.
I also use a 5 length RSI on a 60 min chart and look for it to
get overbought and cross below 70%.
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SPX 2011
Posted by matt on 6th of Mar 2012 at 10:31 am
$SPX - remember the market isn't going to go straight down, you always get an oversold bounce to get it overbought on the 60 min charts via the Stochastics over 80%. For example, even for a corrective pullback, short the wave B bounce. Here's the SPX chart from early 2011, while I don't expect it to repeat eactly like this, something similar would not surprise me. In 2011 the SPX had a 3 week 7% correction.
A Corrective move low would be an ABC move, therefore short the wave B if you are not short, don't chase it short now. Even under a bearish scenario wave 5 trend starting, you would still get a wave 2 oversold bounce. When shorting, short into oversold bounces, vs shorting breakdowns
Matt, do you watch the
Posted by frtaylor on 6th of Mar 2012 at 11:07 am
Matt, do you watch the 60 stochastics or the 14/3 stochastics?
I watch both, it depends
Posted by matt on 6th of Mar 2012 at 12:22 pm
I watch both, it depends honestly, many times the 60 Stochastic wont't get overbought in a good downtrend. the 14/3 Stochastic on the 60 min is still a much better risk/reward vs shorting a breakdown because you are shorting overbought conditions.
I also use a 5 length RSI on a 60 min chart and look for it to get overbought and cross below 70%.