Professor’s Comments – Before the Open 4/18/2022
Posted by OMS at April 18th, 2022
Last Thursday’s high on the Russell 2K rose above Tuesday’s wave ‘a’ high, so from a pattern perspective, wave 2 of Wave 3 down can now be considered complete. The level to watch for today is 1991. A break below this level will be the first sign that wave 3 of Wave 3 down is starting. If the decline begins to look impulsive, watch for a break of 1976, the wave 1 of Wave 3 low. If this break occurs, it will confirm that wave 3 of Wave 3 down is underway.
From a trading perspective: Thursday’s final 4-hour bar on TZA turned Green. The 4-hour bias is positive, so IF we get a confirmed Green Arrow today, I’m a buyer.
The bias is also positive on the 5-min bars, so with the futures on the RUT down this morning, I’ll be looking to scalp trade TZA long on all confirmed Green Arrows. Exit will be on a red bar.
The Bearish patterns on the NASDAQ and S&P continue to progress. A break of the 12 April lows on both indexes will suggest that either wave 1 down is extending or wave 3 of Wave 3 down is underway.
My best bet trades for today, based on Bearish technical patterns, continue to be the inverse RUT (TZA) and inverse NASDAQ (SQQQ). Always trade in the direction of the bias, especially when the bias positive and rising.. A positive, rising bias is the key to successful scalp trades.
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Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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Category: Professor's Comments