Wednesday, August 22, 2012

Key Reversal Triggers Dow Sell Signal

Commitment of Traders sell signal triggered by key reversal bar.

August 22, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

The Dow made a new four month high at 13308 yesterday. The new high was masde on declining volume and open interest and the market was unable to hold the new level leading to a key reversal bar.
This is a classic example combination of technical and fundamental factors coming together to create a solid trade setup. The Commitment of Traders commercial traders have been selling the Dow for the entire rally, paring more than 50% of the long position they accumulated at the June lows. Fundamentally, we discussed the overvalued nature of the equity markets in last week’s blog. Finally, the key reversal bar at 90 day highs is technical analysis 101. We have sold the Dow futures and placed our protective stops at yesterday’s swing high of 13308. 

Key Reversal Triggers Dow Jones Sell Signal

This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

1 comment:

  1. Hello Traders,
    Again the NIFTY has proved us right. Yesterday hit the high of 7601.80 & able to close above 7550.We booked heavy profit in our NIFTY & PSU banks call. Now for the coming week our technical team think some sort of consolidation in NIFTY & all stocks. So they believe trader can sell NIFTY around 7650-7700 with stop loss of 7800 for the target 7300-7200.We are giving small stop loss this time as NIFTY alreadyCOMMODITY , STOCK TIPS showed a very heavy rally last week so it should show some consolidation & sideways pattern till the next up move. Second factor is that some Indian data will be announced next week like inflation. Till then sell will be more safe strategy then the buy. For further updates you can visit our website.