Hey Market Pilot,
Last week, I stated that I was wary of the market bounce from Monday the 20th’s big drop. The market never goes in a straight line and when we get such a big move down like that, price often needs to retest support from those lows sometime in the future.
So the bounce from the 20th’s low was fairly easy and a reasonable play, but as referenced in my last newsletter, the bounce was likely into resistance. For the Moxie Indicator™ members, that resistance is what I call an Inverse Trampoline move (a condition where the Moxie Indicator™ is below zero, but price is over the 50 simple moving average (SMA).
We saw this form very clearly on the hourly chart. In the screenshot below, you can see the condition circled in red and this is what gave me the confidence to short a few names and not be fooled into a long setup.
The Inverse Trampoline setup worked like a champ and saved us from disaster on the long side. Now that price is back at the previous low to form a double bottom, we need to see who wins the battle, the bulls or the bears. Right now, the bears are taking a break but I am thinking they might just be bear flagging before another leg down. We shall see.
Your Profit Pilot, TG
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