Tuesday, February 22, 2005


With the 174 point freefall today, the Dow is certainly starting a downtrend. My upside target of 11100 won't be reached. Other than the target of 10825, this is a few targets in a row that have not been realized and I'm going to try another analytical tack starting now.

Because the stochastics indicator below the chart has dipped below 80, I'll posit that the chart says to initiate a short position, starting tomorrow. The bar is red and after today's drop, some downward movement is a certainly, I think. I won't exit the imaginary position until the stochastic indicator drops below 20, then rises above that mark. To make it even more challenging, I will record the absolutely worst price tomorrow to go short and count from that point. I'll do the same going long to close this position. That will take any slippage and bad fills out of the equation. In other words, I'll record that a short position will be taken at the low price of the Dow tomorrow.

We'll see how the trade and any future ones do. And again, I won't sugarcoat the results if they are bad.

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