Tuesday, April 14, 2009

April 14, 2009 Tuesday Trade 1 and 2

Trade 1 - Waited for overbought condition on 3 min chart to short near the VWAP (volume weighted average price) expecting a nice push down due to the topping formation (potential head and shoulders) shown on the hourly chart. I scratched the trade because the price action was too strong. Short 2 Contracts Scratched Trade +0, -.25 points

Trade 2 - Same setup, saw VWAP had tailing piercing through it and we were overbought shorted 2 contracts. Here shorts were actually trapped there was a really strong ramp up. Short 2 Contracts Stopped Out -2.5, -3 points

Trade 1 (Short 2 Contracts Scratch +0, -.25 points):
Trade 2 (Short 2 Contracts Stopped Out -2.5 -3 points):
Trade 1, 2 Screenshot

Note: The VWAP did contain the price but only for a short time. Basically the price followed slightly below the VWAP sideways, which is more of a bullish flag-like pattern, a lot of shorts were trapped it fueled an extremely fast short squeeze.