We can reference the intraday chart of the Nasdaq100 futures below and consider some important short term price developments:
First, from the Nov 16 low of 2492 - Dec 3 (UpThrust) high of 2698.50, the market has traveled 206.5 pts in 11 trading days for a 50% retracement of the Sept 21-Nov 16 pullback. This is a move of rapid extent and duration.
During the 11 trading days of retracement that developed we saw an important Momentum Buy Signal come into the market at 2651.75 (Nov 28 - See chart below).
Thirdly, the weekly structure of the market has seen Bullish-continuation for two consecutive weeks with the Nasdaq recovering losses (from Sept 21- Nov 16) back into and above the November monthly lows of 2600 to retain a Bullish Monthly time frame condition (Bullish Major Trend).
And importantly, AAPL was unable to recover and close out November back into its bullish Monthly channel at 587 level, despite being right in that price range for 4 consecutive trading days, establishing a new Monthly Bearish Condition --- This has potentially negative implications for the broad market in general.
Taking a look at the chart below, we can see the '3DNR' topping, which concluded its 3rd day (Dec 3) in an UpThrust formation (red down arrow) and followed through (yesterday (Dec 4)) with the SE-C (Closing Sell Signal 2665.25). What I would have like to have seen coming out of the 3 Day Narrow Range Pattern within a Long Bias of 11 days is a rapid liquidation break move away from the 3DNR pattern. The market broke lower initially yesterday (Dec 4), but closed the day back in the 3 day pattern, which gives the short term topping less credibility. The UpThrust (Dec 3) pattern also developed in a light volume trading day.
So, I've taken a smaller position (fractional 'Kelly' bet) - Entry at Dec 3 closing 2664, anticipating the UpThrust continuation into Dec 4, with expectancy of a move back to the 'Strong Buy Point = 2611.50' with STP at 2703 (above the weekly high 2689).
My position in general is to take (almost) all trading signals generated with reasonable risk-reward expectations (at least 2:1) as opposed to taking only the signals where I 'think' may be right, because this game is not about 'being right' or about 'having control' -- it's about probabilities of accumulating small-moderate wins over larger sample sizes of trades.
My Current Positions:
1.NQ Short Swing Program = Short 2664. STP 2703.
2.NQ Momentum Swing Program = Long 2651.75
2.GC Momentum Swing Program = Short 1714. STP 1733.
