This is an "if" idea for a short.
Seeing how the volume has grown significantly at this level (which coincided with the previous level of commitment to the downside from the previous leg down), this is an area to watch. After a strong move downward, the price is moving higher on low volume. This signifies lack of buyers. This hourly move comes against the background of a higher time frame weakness, which by my estimations is printing wave B of the ABC correction on the daily time frame. By my wave rules, wave B has already been qualified, so a reversal can happen at any point*.
While a more short ideal trade would be in the vicinity of 11200, the hourly candles are showing weakness in the background in terms of increased volume and the shrinking of bar spreads. If the candle in the next two hours is printed on low volume in the vicinity of the upper wick of the previous swing high, it is a signal to short. Another scenario would be a high volume candle that has its wick at, slightly below or above the previous high with a close in the lower half of the bar. However, this might be the widest bar in the 9 count**, which may changing the placement of the stop.
This setup is either negated or requires more caution and re-evaluation if a high or medium volume bar closes around the wick or higher than the high of the previous swing high.
Remarks:
*I am using a slightly modified version of the TD wave count from the Perl book to incorporate an element of time into the Elliot wave theory.
**My stop loss is based on the widest spread from the previous 9 candles, hence it is important to wait 2 hours to erase the widest bar from the count. This set up is only valid in 2 hours.
The entry price is an ideal price. The stop loss is adjusted according to the actual entry price, so it may be a few ticks higher or lower.
Entries are done with market orders, so you have to watch this. No limit orders for this particular trade are possible.
Seeing how the volume has grown significantly at this level (which coincided with the previous level of commitment to the downside from the previous leg down), this is an area to watch. After a strong move downward, the price is moving higher on low volume. This signifies lack of buyers. This hourly move comes against the background of a higher time frame weakness, which by my estimations is printing wave B of the ABC correction on the daily time frame. By my wave rules, wave B has already been qualified, so a reversal can happen at any point*.
While a more short ideal trade would be in the vicinity of 11200, the hourly candles are showing weakness in the background in terms of increased volume and the shrinking of bar spreads. If the candle in the next two hours is printed on low volume in the vicinity of the upper wick of the previous swing high, it is a signal to short. Another scenario would be a high volume candle that has its wick at, slightly below or above the previous high with a close in the lower half of the bar. However, this might be the widest bar in the 9 count**, which may changing the placement of the stop.
This setup is either negated or requires more caution and re-evaluation if a high or medium volume bar closes around the wick or higher than the high of the previous swing high.
Remarks:
*I am using a slightly modified version of the TD wave count from the Perl book to incorporate an element of time into the Elliot wave theory.
**My stop loss is based on the widest spread from the previous 9 candles, hence it is important to wait 2 hours to erase the widest bar from the count. This set up is only valid in 2 hours.
The entry price is an ideal price. The stop loss is adjusted according to the actual entry price, so it may be a few ticks higher or lower.
Entries are done with market orders, so you have to watch this. No limit orders for this particular trade are possible.
Comment:
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