Waited today until the QQQQ had retraced to the upper Fib extention levels before bought in. Looking for a nice pull back later today as trader take out their profits from this run up. NEWS was bad this morning so I do not see it staying positive for long.
Got burned on this one. Bailed out with a $500 loss. Should have only played the opening ABC pattern instead of the re-trace at the extentions. Live and Learn....Stick to the plan. Staying out of the market until the Obama economy fiasco is finally announced this week.
I have posted an EasyLanguage Fibo indicator here: http://www.elitetrader.com/vb/showthread.php?s=&postid=2297449#post2297449 <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2297449>
Today I waited for the Weekly Oil Inventory report to come out and watch USO run thru it normal motions. When the initial spike down came back and closed up I went ahead and and entered for a down trend play. The past couple times this report has come out it has followed the same type of pattern.. Spike.. pull back... then continue in the direction of the news. Place a Fibonacci w/ ext. on the peak to give me my exit targets. Exited with $960 in my pocket. Helped make up for the bad trade on QQQQ the other day.(-$500)
I missed the initial entry to buy a call off the ABC pattern after the open, so I waited for it to hit the Fib extention. With the down gap at the open I am looking for the down trend to continue this afternoon, and it did. $660 return after commission.
What a way to finish out the week.... $1,110 profit from todays trade. USO followed the same pattern again today. Missed my enrty on a Put purchase, so I took the Fib extentions as a turn around point to play the calls instead. Once it started to exhaust near between the extention levels I bought the 25 calls to play the retrace. Setup my exit points at the extention levels again going the opposite direction.
Extention Levels are used for "Targets" that the markets will react. Just look at any stock or index that has HIGH volume....It works for me......
That's my point - the markets are made up of people, and these people have to pick a number. People tend to think alike and like numbers that feel right (pivots, trendlines etc), so over a large sample the same number will often arise, giving significance to all of these technical points.