Hi Rainman
Good to hear from you again. Nothing at all wrong with your strategy. If your banking little profits and sleeping well at night with no worries your a winner.
If the markets are keeping anyone up at night then they are in the wrong game. The markets can be a cruel unforgiving mistress whereby you need a strategy to keep her under control, she shouldn't be controlling you. If she is winning then your strategy needs to be corrected.
I can't fault your idea of another long entry. It just a question of risk management , timing and price. I can't give advice.
I am already long with a low entry price on a couple of occasions. I want to add to my long position if the price is acceptable so I set targets that have some flexibility as I see things play out further down the road. remember I am already long so it's not much skin off my back if I miss out. I have missed my targets before and it will happen again, but, I have successfully hit a number of targets. That's how I have achieved free carry on some of my shares. Currently I only partially free carry PLS I need one more score at the right price.
Where are we now with what has played out in the charts. I have attached a long period graph. Green text is bullish, red text is bearish.
* The first bullish period went from 0.71 to 3.89 with two higher-highs and two higher-lows along the way.
* next the bearish period from 3.89 down to 1.97 with two lower-highs and two lower-lows along the way. Notice that I also labeled the last lower-low with a green higher-low as it was above a previous higher-low earlier.
* Next a bullish run from 1.97 to eventually 5.66 (head and shoulders pattern) not many bumps in the road with this run.
* next another bearish run from 5.66 down to a lower-low so far of 3.36 on the journey we have had two lower-high including the last one at 4.92. This peak could move even higher in the short term but would need to get above 5.26 to change it to a higher-high.
What am I looking at. The current trend on the chart is bearish the SP is currently at 4.72 and for so far this week seems to be retracing. The all time high is 5.66. Looking at 4.72 to 5.66 doesn't look like the risk versus the reward is that great if it reaches 5.66. My wallet is staying in my back pocket as getting in at 4.72 would raise my average price by too much.
Next the short term chart. the second chart. Today I agreed with hoots that we have a possible handle forming to the cup. Notice on the chart we had three gaps one was filled today. Common retraces fall between the 23-38% range. Retraces that fall between the 38-50% are less common but can't be ruled out.
Notice that the common retrace of 23-38% could fill that second gap. A retrace just beyond 38% say to 42% would fill the third gap, a chance not to be discounted. A handle commonly forms down to the 23-38% range , less common down to the 38-50% range. Beyond 50% the handle is broken an the bears rule.
On the left of this chart notice in the rising pattern to a peak of 5.26 that there were two gaps. Both filled. the FIB retracement sail right through the 50-61-78, past 100% level to set a new lower-low.
Where do I sit on my possible top up buy-in?
Firstly I currently think that the retracement is underway (broken if it gets above 4.92). I believe that the retracement ( and could be handle) on the downward move will form an ABC waves series. So I will be looking at where the downward A wave gets too and then the size of the B-wave bounce. I am not looking at small 1 or 2 day bounces unless they are of significant size. That will give me some targets for the possible C-wave extention.
If the second gap fills my eyes will open a little wider. Not an entry point for me but I am already a long holder.
I have previously posted about the similarities between this current upward cycle with the previous upward and downward cycle which reached a peak at 5.26. It was my Groundhog Day post. the upside cycles matched remarkable I will be watching this downward cycle for similar downward events.
Just the way Ideal with the markets so that I am not surprised by what plays out, as always DYOR.
Hope this helps you a little Rainman
cheers Lies.
PS I typed in haste there will be mistakes. lately I have been typing a lot.
(20min delay)