Professor’s Comments – Before the Open 4/22/2022
Posted by OMS at April 22nd, 2022
There’s a good possibility that yesterday’s sharp intraday reversal of 700 points in the Dow was the conclusion on Wave 2 up and the start of Wave 3 down. Intraday reversals like the one we saw yesterday are often seen at important tops. The large intraday reversal was also seen on the NASDAQ (reversed 557 points), S&P (reversed 120 points) and RUT (reversed 73.17 points).
IWM, the tracking ETF for the RUT, reversed 7.78 points from its intraday high to its low. Yesterday, IWM closed at 197.80, down 4.53 points. A break below 1981 on the Russell 2K or below 195.88 on IWM, will confirm that Wave 3 down is underway. That’s less than 2 points away from yesterday’s close. Pay attention.
BTW, from a trading perspective, the bias on IWM’s 5 min chart turned negative at 10:35 yesterday. That’s when a Green Arrow appeared on TZA with the shares trading at 31.35. A little less than 3 hours later, the first red exit bar appeared, with TZA trading at 32.99.
The bias stayed positive for the rest of the day, enabling two additional Green Arrow trades for profits of 0.69 and 0.56. Total trading profit for the day was 2.79 points. Nice!
Again: Always check the bias before you start your trading day. ALWAYS!!! If you plan to scalp trade during the next few days, make sure you trade in the direction of the bias. If you’re trading the long side, even with an inverse ETF, make sure the bias is positive AND rising. A positive, rising bias is the key to successful Green Arrow trades.
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
All of the commentary expressed in this site and any attachments are opinions of the author, subject to change, and provided for educational purposes only. Nothing in this commentary or any attachments should be considered as trading advice. Trading any financial instrument is RISKY and may result in loss of capital including loss of principal. Past performance is not indicative of future results. Always understand the RISK before you trade.
Category: Professor's Comments