The markets are correcting and the Dow is in daily and weekly downtrends. The ES is also in a daily downtrend but the weekly charts show congestion. Weak stocks are tumbling. This is the time for stocks that are strong, as they will probably get stronger when the market returns to an uptrend.
Lets look at Facebook as an example.
Chart 1 - Daily
This daily NASDAQ chart shows a new volume buy entry with accumulating volume (indicated by the red arrow).
Chart 2 - Weekly
This weekly NASDAQ chart shows a wide magenta bar indicating twice average true range (indicated by the red arrow). Normally the price will consolidate here and then push up through the high of the wide bar.
Note: the red arrows are placed for illustration only, and are not part of the software.
Hawkeye Perspective
When prices close higher than the wide bar on the weekly this will indicate strength and an entry to the long side. Warning: if the indices are still falling wait until they turn. You are trading risk so you need to wait for a low risk entry. NASDAQ rising and Facebook rising – a potentially great trade!
Now I am confused.
Daily Chart shows red arrow even though Trend & Heat Map are green ?
Weekly Chart also shows red arrow with all indicators green ?
With both charts in agreement why not enter Long Trade ?
Sorry to confuse you Isadore. The red arrow is only for illustration, to point out what is being discussed… a better choice of green color would be in order here, so our apologies.