Preparing For The Next Most Likely Signal - November 10, 2011

[Billy]

Forum Clusters 111110.xlsx

Yesterday’s selloff is increasing the odds for a short signal to be issued soon. But it is still too early and the robots are still neutral and waiting for a strong edge confirmation before entering a new trade.

At last, WS1 (71.89) was hit first before WR1 (76.37) this week. It is in close confluence with our two good old friends YPP (71.84) and QPP (71.25) which are in the same very strong first support cluster as the 50-day moving average (69.73). The strength of the support could help a short term bounce. If it happens with a weak money flow, the robot might then issue a short setup and trading plan. If IWM closes today or tomorrow well below QPP (71.25) on weak money flow, the expected following bounce off the 50 dma (69.73) could become the next short setup if a strong edge emerges.



GDX has a high probability of being stopped in its fall by the strong first support cluster where both the 50 dma (59.43) and 200 dma (58.26) are in confluence with the quarterly pivot (58.40). From a strict multi-pivot perspective (not from an objective robot setting) an excellent long risk-reward setup is waiting with a limit long entry of 59.23, just below the 50 dma (59.43). The initial risk would be much limited by the support from the 200 dma (58.26) and QPP (58.40).
Billy