Got Shorty.. finally
July 13th, 2005 by BWV
Well, it took an extra day to get my setup.. TradeBack entries are much better in the morning than afternoon.. the later in the day, the more lasting the move tends to be..
I got my signal at 9:50 this morning, when yesterday’s highs on DIA were rinsed by 1 penny. I’m short DIA right now, using that ETF for short exposure primarily because for this entire 3 month rally off the April lows, it has been the laggard index of the four majors (Dow, S&P, Nasdaq, Russell).
Market Breadth versus the Index also bodes well for this short. There are 500-something more stocks Down on the day than Up on the NYSE (from yesterday’s close).. Meanwhile, the Dow is up 20.. a classic Negative Divergence. My default “equilibrium” is a 10-1 ratio of Adv-Decl versus the DJIA change.. so, with DJIA up 20, there “should” be 200 more Advancers than Decliners.. there are 500 less !
Still, keeping a tight leash on at least 1/2 of this short.. stop at today’s highs for that 1/2, and the rest I’ll let ride as a hedge on my Swing longs.
Also, picked up that FWLT that I was yapping about.. on a TradeBack entry, as described.. now 150% of a normal position.. will make that 250% on a move up thru 21.06 anytime soon.
