Dear Trader,
Sorry I haven’t written much in recent months. Totally focused on trading. This up and down volatility creates challenges and also great opportunities for a nimble and alert trader.
I continue to post for traders in SpikeTrade.com several times a week, and today would like to share with you a piece from my Sunday post:
As I had mentioned many times, both here and in Password classes, my favorite pattern is a false bullish or bearish breakout with a divergence. I think it is highly likely that the S&P will break below its October low, marked on the chart. Now I watch MACD-Histogram. Bottom A marks the latest maximum power of bears. Top B – breaking the back of the bear. MACD-H is now pushing into a potential bottom C.
If MACD-H ticks up from a more shallow level than A, a bullish divergence will be in place. Then, after the S&P rises above the indicated low, the downside breakout will be marked \ false, and the pattern will be complete, suggesting a long trade.
Two caveats: 1) if trading an individual stock, look for a similar pattern for that stock, not only for the S&P. 2) this pattern is developing on the daily chart, but not on the weekly. It suggests a bounce but says nothing about a long-term bull or a bear market.
Let me also repeat two friendly warnings: 1) these aren’t normal times, consider trading a smaller size than usual; 2) we’re now in the midst of the earnings season, be sure to check the earnings date for every trade and skip it if earnings are just a few days away.
*****
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***** Winning with Elliott Wave and Serious Risk Control *****
We invite you to the next session of SpikeTrade Password course, which will be taught by Spiker (elite-level Member) Tim B, a winner of multiple Golds, on Thursday, October 26, 2023, at 6pm ET:
For those who haven’t been watching Tim’s trades, we offer this equity chart, covering his SpikeTrade performance for the past 18 months. Just read the number in the green box and notice the quality of his curve.
In his presentation, Tim will show you chart patterns that he trades, outline his conservative risk management, and answer questions.
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Best wishes,
Dr Alexander Elder