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Monday, January 20, 2014 1:44:18 PM
When a KISS isn't a KISS
Thought I would use this as a good opportunity to show you when to NOT take a KISS setup.
We've talked a good bit about the moving averages meeting and that, during a counter trend move, that's what we look for if we want to get back in on the larger trend.
But I wanted to mention an important criteria that I haven't before...the price action needs to be WELL away from the moving averages when the KISS occurs. Take a look at this 30 minute NU chart...this is why I cancelled my short order at 0.8270 a while ago.
When the price action is sitting right at the MA cluster when the KISS occurs, it's not an opportunity to get in short. It's actually a signal that the price is setting up for a continuation move north instead as it uses the MA cluster as support. Now if the price action were already up to that 38.2 fib as this MA KISS was happening, I would feel very comfortable shorting it. But as it is, I think we're just setting the stage on a shallow pullback for a push UP to the 38.2 fib instead.
Look back through the charts when this occurs and you'll find time and time again that this type of clustering, even though it's a counter trend move, leads to more movement in the direction of the counter trend. It can still flip flop back and forth around the MA cluster for a while but overall, it wants to move up.
NU 30 Minute Chart...
Thought I would use this as a good opportunity to show you when to NOT take a KISS setup.
We've talked a good bit about the moving averages meeting and that, during a counter trend move, that's what we look for if we want to get back in on the larger trend.
But I wanted to mention an important criteria that I haven't before...the price action needs to be WELL away from the moving averages when the KISS occurs. Take a look at this 30 minute NU chart...this is why I cancelled my short order at 0.8270 a while ago.
When the price action is sitting right at the MA cluster when the KISS occurs, it's not an opportunity to get in short. It's actually a signal that the price is setting up for a continuation move north instead as it uses the MA cluster as support. Now if the price action were already up to that 38.2 fib as this MA KISS was happening, I would feel very comfortable shorting it. But as it is, I think we're just setting the stage on a shallow pullback for a push UP to the 38.2 fib instead.
Look back through the charts when this occurs and you'll find time and time again that this type of clustering, even though it's a counter trend move, leads to more movement in the direction of the counter trend. It can still flip flop back and forth around the MA cluster for a while but overall, it wants to move up.
NU 30 Minute Chart...
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