Time to update Friday's post on the TRIN Indicator. Turns out the divergence (negative adjusted TRIN value but strong up day) was just a "glitch in the matrix" – we've rallied 25 points since.
Today's video re-visits the swing trading oscillators (TRIN indicator, Put Call Ratio and Smart Money) plus shows a synchronized cycle set up trade that signaled this afternoon's rally.
If you're reading this article via email or RSS reader, then follow this link to view the TRIN Indicator video on the website.
TRIN Indicator Update (7:35)
In the video I also mention a setup I call "Pulling into the Pocket". The charts below show an example in June 2008 and today's setup. If you're reading this article via email or RSS reader you'll have to check out the charts on the website – for some reason when I post a video, the charts don't get transmitted.
Pulling into the Pocket: 5 June 2008 (Emini daily)
Anyway, the setup goes like this:
- Break into a down trend signaled by X-Trend trailing volume stops
- Emini rallies back below the trailing stop line (dotted white)
- Exhaustion up day signals blow off buying volume (red paintbar)
- Trailing stops don't get broken and the downtrend continues
Here's today's chart. I'm waiting to see how close we get to the trailing line and for a climax volume down bar, which will signal a likely continuation of the down trend.
Possible Pulling into the Pocket Setup (Emini daily)
For me this setup feels like dropping back under the lip when surfing a barrel, with the trailing stop line acting as the lip of the wave. Well enough of my vivid imagination and good luck with your Emini trading over the next couple of days.
