As we open the week we have a potential shorting opportunity setting up on SPY in the Daily timeframe. The False Bar Stochastic tells us that we are in a down trend on the SPY and the fact that the stochsatic has now just broken 75 we have our first signs of a Stochastic sell. From our Elliott work we know that as long as the market does not exceed a 61.8% retracement we have a good chance of continuing the current trend, that level currently is 151.08. If that is taken out it would invalidate the shorting opportunity.
We can trigger this trade if we take out the regression trend channels and confirm selling has set back in. If the trade does trigger our potential target is 138 based on the M.O.B.
Ron Wheeler
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Do both stochastics have to be above 75 for the setup to be valid?
Posted by: jack | December 04, 2007 at 11:54 AM
When looking at the stochastics, the fast stochastic is making a new new high relative to the previous swing high on the price chart (end of October). Would you filter out these setups if stochastics make new highs even though price has not?
Posted by: Day Trading Stock Tips And Articles | December 11, 2007 at 10:41 AM