Thursday, September 1, 2011

Trade Set-Up on Inverse Index ETF's

Click on Chart to Enlarge

The set-up for a bearish trade is coming along nicely here. There are a few strategies that could be used for entry. One strategy I mentioned in a recent post which was to wait for the %D line on the daily fast stochastics to go back below 80 and enter then. Another method is to place a sell stop at the trailing 1 candle low once a bearish cross occurs on stochastics. In this case the sell stop would be at the low of yesterday's trade. The stop would go above whatever high is made on the current 2 week rally.

An alternate method would be to use the hourly chart with the same indicators I showed on the EUO trade last post. Wait for the -DI to cross above +DI and for the MACD to be in a sell signal and enter short with a stop above the recent high.

New Trade Order:

Place day only buy stop order at 49.00 on TWM (2x inverse Russell 200 ETF). Place a GTC sell stop below today's low if filled.

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