GET Copyright <c> 1=188 v2.5 F1 = Help Stochastic
X " " 880H RZL2=8726 ST 12 SH®0 8C20 8(508 8523 8516 850H 8M2M 100
Sep Oct Nov Dec Qan Feb
T PftHTiQ TBflQQQ Wednesday 02/08/S1^ 8S30
LOOK OUT BELOW!!!
From the high of 9117 on 2/8, prices on 2/9 plummet right through our first Retracement Zone into our second. On 2/10 prices reach a low of 8806, closing at 8821. (The midpoint of the lower Retracement Zone is 8809).
Stochastics probably have already run half their course before you would see them. But there is a clue. Whenever %K "hooks" sharply, like it did on 2/8, anticipate a sudden and dramatic price move. This hook could come on the day of the price move, or one day before.
There are not technicals a beginning trader could use to chart a move such as this. Place your order, set your stop and hold on for the ride! A possible order would be to cover your short position somewhere in the Retracement Zone.
Again, what you see in Chart 38 is the whole picture. On the evening of 2/ 9 all you would see is the price collapse and the stochastics in the neutral area. There is one clue to possible lower prices - the gap between 2/9 and 2/10. After prices crash into the first Retracement Zone, and close on 2/9 at 8912, trading opens on 2/10 at 8906. Knowing of that gap, you may want to short the market with a potential target near the 63% level of the Retracement Zone. With such downward momentum, a 100% retracement of 8718, or even 8600, may not be unexpected.
Assuming you would want to crap shoot this trade, you could have shorted the market after the opening of 2/10 and set your stops along either the 82-degree or 75-degree line from the high on 2/8 of 9114.
Both stochastic values cross 20 on 2/14/89. Considering the size of the move and accumulated profit in two days, why wait for "just that little bit more?" Cover your shorts on the opening of 2/15 at 8803. (The low for the day was 8801.)
Taking this trade would have aptly rewarded you.
Refer to Chart 40.
TRADE 4: Sell short on 2/10
Bought on 2/15 Total Points
$1025.00 profit in 3 trading days!
Previous profit balance Profit from Trade 4 Current profit balance
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