My S&P 500 trade (ETF Proxy – AMEX:SPY) “ping-ponged” successfully from the entry one (Red Zone) to the take profit zone (Blue Zone) this week for another quick and easy profit.
This trade is so typical of the “grind” type trades that seem to dominate my P&L column these days. Not the long sweeping trend trades that so many seek in vain, but small, reliable and repeatable profits as the markets cycle between areas of liquidity. A new cycle has begun that I believe will reach back up into the red zone to “sip” liquidity, then turn back lower to revisit the blue zone as I have drawn above.
If this indeed plays out as forecast, I’ll have had two chances to essentially take the same trade for double profits! If you have maintained positions in this trade, this wiggle will build the foundation for a new move lower, as power is growing steadily to the downside. When this next cycle high is formed, I would trail stops there and sit tight.
Facebook (NASDAQ:FB) continues to chop its way through the red zone. Nothing has changed in my forecast for this stock, I am just waiting for the bearish power of the red zone to take change and send price lower to my take profit zone near $52.50 per share.
The stock of Abbot Labs (NYSE:ABT) is the next short on my radar…Again, you can see my forecast as offered by the 3D Apex Trading Methodology outlined here in red and blue with the zones labeled to ensure there is no confusion.
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