I am convinced with the rally having progressed this far that it is now safe to start accumulating short positions given that the next correction is almost certain to come back to the present level if not lower - therefore if one is prepared to hold on for the correction the worst outcome is break even.
Accumulating a short position as the correction approaches is my favourite old number one trading strategy and it has proven itself reliable.
It is based on couple of simple ideas.
1. Decide what kind of market it is. My analysis says the rally is encountering resistance.
2. Place TWO limit sell orders above the chosen market.
Why two? Let's take an example, say you sell DJIA at 10325
If the market overshoots to (pick a number) say 10375 and retraces only to 10325 there is no profit in the short at 10325.
With a sell orders at (say) 10325 and 10375 then there is profit on one and break even on the other.
Doubles the chances of a winning trade.
If the market gallops up and away and does not retrace then see 1.
THIS IS NOT A MARKET ENCOUNTERING RESISTANCE AND I NEED TO CHANGE STRATEGY.
any thoughts any one?