Off To The Races

Last Thursday I suggested an entry on BIDU that was producing a lot of context. It was one of those trades I almost find obligatory as it’s a good example of when things are starting to align. Not that this is ever any guarantee that it’ll go as expected – good example was crude this morning which was facing a ton of overhead resistance but then suddenly took off in the ‘opposite’ direction. No matter how long you play this game – the market will always be smarter than you and soon as you have an opinion you are guaranteed to get punished.

BIDU however decided to play ball. Observe the setup – a possible retest variation (could be a retest as well), followed by a shooting star, followed by an inside day candle (which was our active pattern). And all that happened right below its 100-da SMA which was meeting the 25-day SMA. On the hourly side we had the 25-hour SMA push toward the 100-hour SMA – both were holding (mas o menos) and slowly driving higher.

Friday we got a breach in form of a hammer candle (bullish) which also managed to close above the 100-day SMA (very very bullish). And today – the finger of God and we are officially off to the races. Beautiful setup and if we got one of those every week I could probably retire by next year 😉

The Dollar has reached the end of its easy run (i.e. the outside of its 100-day BB) and is now painting an inside day candle. Great setup with good context – a little correction here would not be untypical.

EUR/AUD – perfect context here as it squeezed everyone outside the 100-day BB and is now producing a pretty small inside day period. Love these types of setups.

But wait – there is more (there usually is):

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Cheers,