Trading 1-2-3 Patterns
06/10/2010 12:01 am EST
Traders must have patience as we look to capitalize on the 1-2-3 pattern. Using the chart samples below (real time 1-2-3 pattern confirmations), we can see that the typical setup takes anywhere from four to six months to confirm.
I can’t say that all or even if many will confirm, but if the major indices confirm the pattern, it will be like taking candy from a baby on the short side. As you may know, nearly 75% of the stocks in the market follow or move in the same direction as the overall indices.
This could get fun. I am currently looking for a short-term bounce in the general market and the stocks on my “short” watch list (point two confirmation). After point two forms, we then start to load up (on the action watch list) and look to short upon confirmation.
By Chris Perruna of ChrisPerruna.com