by scaredycatguide | January 10, 2019 2:38 pm
Generally I like to see clear entry signals, but sometimes I try to anticipate a move if it is offering me a low risk proposition with a solid reward.
There are many names for candlesticks and candlestick patterns. Spinning top is one of them and it is what I am seeing on the daily chart of the SPX.
After seeing the SPX gap higher three consecutive days and then create a spinning top yesterday I thought why not get short at the close of trading and put in a stop loss at the day’s high.
Basically, for me a spinning top is when we get a doji candle (indecision candle) after a extended move higher.
So between that and the fact we are pulled away from the 10 day moving average and in a resistance zone (as seen by the lines drawn on the chart) I figure there could be some backing and filling at a minimum, even if things were to remain strong.
Plus, my risk is only 11 points on the upside, hence me willing to take the gamble.
After three straight gaps higher to open the day, SPX is set to open lower today. We are off to a good start, but let’s see how the day plays out though.
Downside I’m looking for 2535, but may take profits at some higher levels that make sense on a day trade basis.
And we are off…
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