Wednesday, May 29, 2013

Market comments and education

Nice sell off today so far this morning - here's a chart that I posted yesterday to my members, as you know the market had a huge gap up yesterday but then reversed shortly after the open and sold off the rest of the day - why did the market reverse so suddenly?  Because it tagged the broken trendline of the channel and logically reversed off it.  Technical Analysis works folks!  

Also just a tip, whenever you draw trendlines, once they are broken don't discard those trendlines because they represent important support/resistance - extended them and look for a re-test of that trendline.  As you can see yesterday's gap up exactly tagged the trendline where it then reversed off for a low risk short opportunity!  When the market has a huge gap up like it did yesterday it's easy to get emotional, however keep your emotions at bay, remain objective, and use your Technical Analysis.  Today the market is down nicely and following through to the downside on yesterday's reversal

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