Bear Trap Thursday Wrap Up

Extremely interesting day – I’m sure Zero subs were taking note of a significant bullish divergence between the spoos and the ZL this morning:

The time line I drew marks the end of this morning’s drop – as you can see the ZL was completely unimpressed and barely even dropped through the mark. What followed was of course predictable and any bears dumb enough to chase the tape down are now applying a second helping of Vaseline.

I ask you know – what other indicator is capable of keeping you ahead of nasty traps like this? Stochastics, MACD, RSI? I don’t think so…

When Geronimo entered its trade today we just had reached the upper standard deviation line of VWAP on the spoos. I was really skeptical there and even sent out a warning to my subs to only take a small position. But despite my doubts Geronimo completed the trade a few minutes after, which comes to show that steadfast discipline is required when trading black box systems. Even I am not immune and I wrote the damn thing 😉

I also would like to point out that Geronimo lost 13 ticks during yesterday’s sideways yawning session. I did mention it in the comment section but as I’m all about transparency I wanted to make sure everyone sees this.

Cheers,

Mole