I also noted the previous day's high on the chart below with a white dashed line. As you can see, price bounced at the 50%, rallied above the previous day's high, and provided a nice entry as it found support at that level. The rest of the price action was textbook - price rallied back above the OR high and pulled back to test that area as support. AXP provided additional entries if you were so inclined (as noted by the second and third arrows). It then rallied to hit the FE and finally stalled out at ~$27; it is important to pay attention to whole numbers, as they can often signal strong resistance.
I made a comment on Trader Mike's blog last night saying "...YHOO, BRCM as well as AAPL were up AH but I noticed the futures were drifting down tonight…nothing major, just a drift. That could change by morning, of course…but that rollover today and the action around 9,000 seems a little ominous." The futures have continued to drift down. Take a look at my post yesterday for possible scenarios.
As always, the markets will do what they will do - ignore those who predict the direction and trade the setups it provides!
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1 comment:
Great trade X. I didn't get in on Amex, but I was watching it thinking this is the kind of trade I should be taking. I also like the Dow charts. I know you aren't trying to predict, but being aware of both the long and short options and scenarios is helpful.
Keep up the great work.
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