ETF SWING & DAY TRADING

[Little Chico]

A suggestion...

...from your good friend, Chico.

When the RSI-5 hit its signal to go long at 41.83 last week, and you took your position, I thought it might be too soon, not because of CNBC's commentary on the Fed (who could predict that panic reaction several days in advance) but because the slow stochastic (14/5) had not yet gone below the 20 level. When it does, it confirms the RSI-5, I've discovered. I held my short position until 41.64, which was a better entry point. The market went even lower, but is snapping back this a.m. from a very oversold level. So, my suggestion is to use the slow stochastic along with the DMI-ADX line as confirmations. Now, the ADX line is still rising this a.m., so we might be cautious, but I expect it to turn quickly based on what the futures are telling us.

Chico