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What a ride we’ve had in the past week!
While many might not have been short for the big falls on the Dow and the SPI, there were a few nice short opportunities leading into this period and I recommend you read Noel Campbell’s past and future articles regarding setups on the Dow and the SPI. We found one such short trade at a recent Gann Jump Start class when we ran a 1-day ABC scan on the US market.
It wasn’t a perfect setup - we actually called it ‘the best of a bad bunch’ - but what I liked most was the basic setup of a double top on a 50% retracement. The stock was Pfizer (PFE:NYSE) and Chart 1 below shows the setup as the class saw it.
Chart 1: PFE Daily Bar Chart with Double Top ABC Short
click to enlarge
This chart suggests you would be looking for resistance above the May high to support a sustained change in trend. I will leave it up to you to recreate highs, lows and ranges resistance cards, but Chart 2 below indicates the power of ranges repeating. Note how the range ran to 200% and the double top sat under the 150%.
Chart 2: PFE Daily Bar Chart with Power of Ranges
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Chart 3 below includes one particular range that showed a strong 50% level. With the May high, this stock had made a false break of the 50% level and the double top was sitting right under it.
Chart 3: PFE Daily Bar Chart with Ranges Resistance Card
click to enlarge
Finally, in Chart 4 below, we have run Time by Degrees back from the trade and shown every 90°, but you could also look for further harmonies with Seasonal Dates or other multiples.
Chart 4: PFE Daily Bar Chart showing Time by Degrees Harmony
click to enlarge
This trade not only went on to hit 200% but the stock was also affected by the big falls in the past week and ran on past 400%. If you took profits at 200%, you shouldn’t be kicking yourself that you missed the rest of the move!
Chart 5: PFE Daily Bar Chart with 200% of ABC Achieved
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The Banks have not been as clear cut. In my last TTN article I mentioned I was watching for Westpac to break below the 1x1 trading day angle and I managed to go short on the close of the 2nd of August. A nice little 3:1 profit was achieved on the 9th of August by setting a 200% profit target, but I covered my shorts on the 5th after the first big fall, taking a 2:1 profit, then sat back and watched.
The market has now broken below the range it has traded in for the past 15-months and has come back to retest the 1x1 angle. At the time of writing it hasn’t moved strongly back down, so Westpac might take its time to give us a nice clear setup under this angle and price level. As always, be alert and trade what the market gives you.
Chart 6: Westpac Daily Bar Chart
click to enlarge
It’s the Journey
Lauren Jones
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