Big Balling Bottom Calling
We have been waiting for nearly a year for the much heralded dollar reversal. Several times I’ve tried for this, and been clown raped for my trouble.
Another opportunity is afoot, and I would be negligent not to mention it. As we all know by now, bottom calling, knife catching bearshitting is one of the fastest and most painful ways to bankruptcy.
I know this from experience, and you wont catch me trading on a wave count if my life depends on it (but thats another story)
The SAFER way to top pick/bottom pick is to WAIT FOR THE RETRACE. That retrace can be a nice easy one day affair like this one you might remember, its a daily chart of the $indu at the March 09 bottom, or it can be more complicated.
Its extremely rare for a major top to not have a retrace of some sort.
As you all know by now the pattern is called RETEST VARIATION BUY
1) Significant low (the lowest low in 10 bars, or the first low to break a previous spike low)
2) One or more higher closes (than the close of the significant low bar)
3) One or more lower closes (than the close of the bar making the (2) higher close)
Buy on break of the high, stop at the low of the setup bar.
Here we have a weekly chart of the DXY, the US dollar index.
I’ve labelled it up for you, we are very close to the long trigger point. Of course its the same trade on the euro, just turn that frown upside down and take it short.
I’d like to point out one other thing. The Euro has sailed past every potential reversal point even though its funny mentals are terrible and its been tempting as hell to top pick it for ages from a number of technical perspectives. If it *should* have cleared the last hurdle and made a run at new highs, IMO this reversal “out of the blue” should result in a greater move in the opposite direction.
Bottom line, if you like holding your positions for weeks instead of days (not my bag but I’ve got the attention span of a dog) this is an outstanding trade.