Fake Out and Shock Chart!

[PristineTrading 10]

 

The markets this morning trended into the mid-day lunch period EST. Unfortunately, it doesn't happen as often as it used to. The opening fake out and shock was classic e-mini action to get as many as possible on the wrong side and caught. That being said, it can be hard to jump on board if you’re not familiar with this setup and it does happen fast.

 

Today, there were additional entries that I have marked on the chart. The Money Bar (MB) continuation setup came a few bars later. One of the key elements of the MB is that it forms near the beginning off the move. We cover this and many other concepts during seminars and follow up coaching sessions.

 

The next entry was a classic Pristine Sell Setup (PSS). The textbook PSS does not have a shock element to it, but it can form with one at times. When they do, it’s like shooting fish in a barrel. Either way, take the PSS when you see one in a downtrend like this. This PSS was the first retracement after the drop.

 

The last entry was the Retest and Shock. After a drop like what was seen, a retest of a pivot high creates new resistance and catches traders trying longs entries against the trend; not smart. This move was going on for about 2-hours and that is pretty long for an intra-day trend. For that reason, the odds weren’t high that this was going to move as far. It was also close to lunchtime.

 

If you use the NYSE TICK - and you should, you’ll notice that the TICK moved to an negative extreme on that last drop. A TICK extreme after a 2-hour downtrend typically signals that the move is close to over. A TICK extreme at the start of a move signals continuation. Common sense, if you know.

 

 

All the best,

 

 

Greg Capra

President & CEO

Pristine Capital Holdings, Inc.