10/30 Tuesday

Accumulating volume definitely caught my eye.

I was just browsing through my charts and that volume stopped me to do a full technical analysis and see if we might have some trade setup here.  Subsequently I’ve realized that we definitely have awesome potential bullish trade here.

Rising and massive volume but this ETF didn’t go nowhere! Obviously it got stuck because of that long downtrend resistances coming down from above but you must note that it couldn’t kill it either.  $SDS maintained it’s level thus traveling sides.  I think we got something cooking here, I can definitely smell it!

Currently I am setting my target at $64 but I might close it out earlier because of the long term SMAs.

Anyways, let’s zoom in a little bit.

Last 4 days, this gap resistance (at around $57)  really bounded this thing and it held it’s position thus making it to move sideways.  Also those downtrend resistances from up top came down put lots of weight on it as well.

So last 4 days, we’ve consolidated traveling sideways but volumes continued to rise very heavily and this is why things are getting very interesting in this chart.  If my analysis is correct, I think we are about witness some big break out to the upside.

My entry is above $57.50 and I would probably put my stop little above $55.

$59.50 is very solid pivot/resistance area.  If we can push through that, I think we might have a good chance to get up to our target. But here are just few problems doing that.  Long term moving averages are in the way.

(10EMA (green), 20EMA (pink), 50EMA (purple))

As you can see here, we have 100 (blue) and 200 (red) SMAs just hanging around up top. Those SMAs will slow us down or possibly could act as resistance so we have to be careful when we get there.

50EMA has been nicely working as support last 4 days so if I want to put a tight stop, I would do it just below that 50EMA level.

If this thing breaks out to the upside, we will see those 10,20,50EMAs crossing which that would suggest huge amount of bullish momentum starting to build with gigantic volume supporting its move!

And here is the final punch that will wrap this whole thing up and make this trade irresistible.

Today (Bullish Divergences)

All three indicators (Stoch, RSI, MACD) CONFIRMED

This is a HUGE bullish signal and this signal is what made me wanting to jump in to this trade despite of the major resistance area and the long term moving averages.  I can stand behind my analysis when many of the bullish argument confirms each other.

Pretty confident in this trade, I think if market starts to tank tomorrow, $SDS will start to travel higher and possibly huge break out is in store.   I will update later.

Last April (Bullish Divergences)

Last April, we had bullish divergences and this ETF rose $10 in less than a month.

But compare to the angle of divergences we have today so much stronger divergences.

10/31 Wednesday

(9:41am CT) Entered Bullish Trade Early

This morning I got in with some calls and my another bullish trigger still remains.

This could be risky for the fact I got in this morning before break out.  Obviously we are in consolidation and we could break on either side theoretically but looking at my analysis I’ve concluded that we have higher chance of breaking upside.

I do have tight stop on this so will see how this plays out.  If this thing breaks out to the upside, my another bullish trigger would get triggered and I will add to my current bullish positions.

11/2 Friday

(10:04am CT)

Just missed my stop and continue to travel higher.  Today’s candle would be what we call a Bullish Piercing pattern however it’s not that relevant because Bullish Piercing is most powerful when it happens after a bearish rally. What we had was not a rally just a short-term down turn.  But still there is a bullishness to this candle we are seeing today.  You can see the psychology behind it.  We gaped down today but we are pushing higher, it’s almost like a counter attack.

My stop was just below 10/22’s lower wick and worked perfectly today.

I am setting my goals pretty high. $60 is my imminent target but ultimately I want to ride it to $64 but we got long term moving averages in the way so I would have to see what happens as we get close to that level.

(After Close)

Came all the way up to yesterday’s open.  Look very poise now to push through $57 support next week.

11/7 Wednesday

(9:49am CT) Gaped Up & Running Into A Resistance

It still early to tell but we would need to close above the current resistance today for continuation of this bullish trade.  We gaped up this morning which that provided great supports for me and so it was good opportunity to tightened my stop today.

$59.50 is next target if it pushed through current resistance.

(After Close) Long Term Moving Average

Going into tomorrow 100SMA is a concern.  During the day today, it hit 100SMA and sold off 50% after reaching HOD and later bulls gained back some of it.  So I am guessing we are going to struggle little bit to push through it tomorrow but today’s gap and high volume will help very much.

11/8 Thursday

Pushed Through 100SMA Resistance

Very strong day. I did very well on my Call options here.  Plus I loaded more yesterday so I did very very well on this trade today and I am holding for tomorrow.  And I do believe the rally is going to continue tomorrow.

We pushed through 100SMA today which was a huge success.  Next stop would be the 200SMA coming up here at around $61.    Also we have lot of bullish momentum building up in the bottom, as you can see that all sorts of MAs are crossing and that’s where you usually see new trend shaping up.

However since this ETF does rely S&P500 so I really need to watch out S&P index to see where this might be going.  $SPX does have a support coming in here at around $1,360 area so I will be watching out for that but as long as the S&P500 tanks, this will continue to soar (They work opposite).

Next Resistances

At around $59.50 area we got a resistance (see arrows) which could slow us down.  If we can push through that, next one probably is the 200SMA at around $61.50

With market tanking this fast, I probably not going to get to my ultimate target of $64 because I do expect some pull backs after a huge run.  So I might be thinking of taking profits tomorrow and possibly re-enter next week. And when market moves this fast, many times the pull back is that much fast so got to be cautious with that.

Look at the volume on that thing. Just skyrocketing here and also the gap is still open which I do believe that it could work as a breakaway gap (Not really a textbook Breakaway because we had initial gap about few weeks ago which failed).

Overall looks very strong for bulls.

11/9 Friday

Closed Out Completely @ $58.75

Closed out my trade on $SDS today after seeing the slow down in the market as a whole.

Take a look at the volume today.  Lot of selling pressure in the morning  and we possibly forming a Hangman reversal at resistance.  Overall good trade and nice profit.