Another Awesome day. If the market gives us these trades all of 2016, it’s going to be an awesome year for us traders. We can only pray that the rate hike kicks up the volatility. Let’s review how we made money today.
The beauty of trading, is that once you buy into a setup, you have conviction, you know when you are wrong, and it doesn’t matter what even the smartest person you know thinks, when you can read SUPPLY AND DEMAND, you will make fools out of all of them.
Today, we came in very bullish, and immidately were greeted with a lower high and a lower low.
For many this is very difficult to catch, but that is why I spend 2 hours every night and 2 hours more every morning planning for the what if’s. This business is not about being right it is about making fucking money. So turn off Jim Cramer, Car Ichan, Whiteny Tilson and every other publicity starved pundit and read what is in front of your eyes. By 10 am the landscape had changed. We had a H&S top targeting 2052.81 and we got there in a matter of one hour we got to our target.
The rest of the day the market really attempted to form a base and rally. We notice that using the 1PM Buy Programs, the market formed a mini inverse H&S and then tried to form a double bottom/Cup Handle and break the prior swing high. However the attempt failed and the pattern failed and broke bake into the range, forming a 2nd H&S topping pattern, which completed.
Remember MONDAY? We had 3 bullish patterns trigger in one day, in the same way we had 3 trigger today. This suggests sellers are trying to take control so be very aware of this.
When you study and master patterns like I have, the failure of them is just as telling as the completion. Failure tells us that strength is being sold. It is the early signs that something is wrong. Both bullish and bearish patterns fail, and that is ok as long as you learn what to do. The patterns will occur almost daily as you know from my reports. It is how you execute that will decide your fate. I am here to help you execute as my mentors were there for me.
For example. I did buy the cup/handle breakout today, but was stopped out flat because I have learned how a pattern should play out and there was enough evidence for me to bail flat and re-evaluate rather then to be stuck hoping. Hope is not a strategy!
Below you can see how the rest of the day played out. In all, we completed 2 and triggered 3 H&S tops, in the same way we did the inverse on Monday. This is not bullish.
THE BOTTOM LINE : After the pre-fed rally, sellers emerged. We triggered 3 and completed 2 H&S top patterns today. Keep your eyes open for failure of the bullish cup/handle and the buillish broadening wedge as clues the market is rolling over.