Slope of Hope Blog Posts

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Another Trading Idea (from facesincabs)

By -

Facesincabs
As mentioned on Saturday, it is my experience as a trader that market
shocks like Friday can present great opportunities for traders, because a
shock event can signal a change. Alan Farley (in his book: The Master
Swing Trader) has defined another trade set up related to shock events
that display themselves specifically against the “wall of worry”.

Hole in the Wall (of worry)

http://www.hardrightedge.com/tour/gap.htm
(gap downs after a strong rally can signal a trend change)

A
definition, specific guidelines, and chart examples are provided on
Farley’s web site, so I will not repeat them here. However, learning
the characteristics of this set up (and making the trade idea your own)
is well worth your time.

Some Friday Examples

Here are
some examples from a scan I ran on Friday. You can watch this trade set
up play out over the next few weeks using these charts.
FHN, JACK,
MSB, NVDA, SSL (see FHN daily and 10 minute charts below)

http://tinyurl.com/y7emg7s
(FHN daily)

Fhna

I
personally like FHN out of this group because it ended Friday closer to
its low of the day. Here is a 10 minute chart that begins to look for
entry and stop areas. Personally, I will be running this scan daily now
to look for fresh trade set ups on the short side.

Fhn

Google (a variation)

Also,
let’s take a look at GOOG (which did not get much blog attention on
Friday), but clearly had some trouble after not blowing earnings on
Thursday like they usually do. The Hole in the Wall set up works best
after the hole reveals itself in the wall of worry, but hole-focused
gaps like the one shown below for GOOG can also work well in forming a
trade.

http://tinyurl.com/y37kaac
(GOOG)

Google

For Skeptics (and beaten up scare-dee bears)

John
Murphy (at stockcharts) noted the TLT on Saturday as something to keep
an eye on. For those skeptical of a pull back here, simply look for any
market pull back to be confirmed by a rise in bonds off this support
area. The TLT has a pretty good history of confirming the equity
markets.

http://tinyurl.com/y6rd763
(Watch bonds for a confirmation of a pull back)

Tlt