Ready to go short

History favors a small sell off

Today I'm introducing a new oscillator on the blog.  I decided to create an overall score each day based on the Daily, 4hr, and RumWave scores.  By simply adding them together and plotting them on the graph, we get a little better feel for market bottoms and tops.  


From now on you will see the above chart and graph.  The new "Score Total" section is shown with the normal red-yellow-green system and it is also graphically shown for reference.  Currently the score total is in the red.  It is a little hard to read, but the score is 841.  Previous peaks since I started keeping scores were in the vicinity of 900 (+-20).


DJIA 4hr Chart

 There are two things I'd like to point out on the 4 hr chart above.  First, the candlesticks are taking on the tell-tale "twisted ribbon" appearance indicating that this impulse's momentum is drying up.  Second, the CCI has started a turn down from a very high level.  In the past, this has occurred 2-5 candlesticks before a major change in trend.

DJIA Daily Chart

 On the daily chart above the CCI is reaching a peak level.  If it starts to turn down, we would expect the market to change direction a few candlesticks later.  That scenario would make sense based on the slow stochastic.  The red line has not crossed the aqua blue horizontal line yet.  So, it is likely that we'll have another day or two of up / sideways, then reverse course.  I expect to look for a shorting opportunity early in the week.

ENJOY YOUR WEEKEND!  GO AIR FORCE, BEAT MICHIGAN!