The other day I posted a chart of QID and the Diamond Top pattern that was taking shape.
Here's an updated look at the same chart.Perhaps we could also have bounded our diamond pattern without the candle wicks and just kept real bodies bounded, in which case we could have had our long signal on Wednesday. When I posted this chart the other day I mentioned that this particular pattern could go either way. I mentioned an upside break would likely take us to the test of the lows, and a downside break a test of the range prior to the vertical move. As you can see we tested (and slightly exceeded) the prior highs and actually made a higher high on a closing basis.
Tricky situation we're in.
A measured move to the upside would put price around $105 range (depending on how you draw the diamond and whether you consider yesterday the break or today). Basically all I can say about it is that as a technical pattern it certainly met my expectations and my measured move target. Where we go from here is a whole other story. The chart looks completely overextended and ready to come crashing down, but what doesn't in this market? Looking at the momentum indicator I use today's move wasn't as large as the previous momentum swing high, but a lot can happen Monday morning.
The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at email@example.com
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