Wednesday, November 05, 2008

NR7 at 50% Fib. Retrace


4 comments:

Q4 said...

Hey, sorry but what is NR7?

Jamie said...

Q4,

NR7 is the narrowest bar over the last 7 bars. Look for volume to contract as well as price. The combination of price/volume contraction leads to expansion. Works well.

Neo said...

hi jamie, did u have a direction u wanted to trade for the day? i was long :( but if i was short i figured i woulda went partial near the low of yesterday. can u elaborate on ur dicision process on this short play when the market has been trending up recently, thx.

Jamie said...

Hi Neo,

1. Futures sold off aggressively after the election speeches. So it felt like a sell the news type of response to the Obama win.

2. I mentioned we were extremely overbought and hitting resistance in the technical post.

3. Bob Pisani (CNBC) mentioned that everyone at NYSE was short.

Those are some of the reasons I thought we would see profit taking. The rest comes from how the charts develop.