Setup Alert re: IYJ

By: Patrice Johnson | Sun, Aug 30, 2009
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8/30/2009 3:14:37 PM

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LONG-TERM TREND (> 1YR) OF THE MARKETS: UP

SHORTS LONGS
None iShares Dow Jones Industrial Average ETF (Ticker Symbol: IYJ)

This e-mail is to alert you that The J.E.D.I. Way will cancel its previous market order to purchase 100 shares of iShares Dow Jones Industrial Average ETF (Ticker Symbol: IYJ) at the market.

After further analysis of IYJ, The J.E.D.I. Way believes that there will be a trade in the making in IYJ provided that one of the following SETUP(s) below have been satisfied:

SETUP 1: Prices on IYJ "close" at or above $48.60.
or
SETUP 2: Prices on IYJ "close" at or below $47.84.

If SETUP 1 is satisfied, The J.E.D.I. Way will go long 100 shares of IYJ at the market, if and only if prices close at or above $48.60 on higher volume than the previous day and the Slow Stochastic has turned up from oversold levels (between 0 to 20) and the RSI is above 50.

NOTE: If filled, we will place a protective sell stop behind our long position at $48.08. This should limit our loss on this trade to $52.00 before commissions (assuming we receive a fill at $48.60).

If SETUP 2 is satisfied, instead, The J.E.D.I. Way will short 100 shares of IYJ at the market, if and only if prices close at or below $47.84 on higher volume than the previous day and the Slow Stochastic has turned down from over bought levels (between 100 and 80) and the RSI has either turned down or is trading below 50.

NOTE: If filled, we will place a protective buy stop behind our short position at $48.08. This should limit our loss on this trade to $24.00 before commissions (assuming we receive a fill at $47.84)

So, if our first setup is satisified , we will purchase 100 shares of IYJ at the market and follow up with a protective sell stop. But if our second setup is satisfied instead, we will short 100 shares of IYJ at the market and follow up with a protective buy stop.

And this would be in line with the old Korean Trading Principal which says "Don't lose money. If you do lose money, lose very little money."

Until Next Time.

Thanks for listening; Good Luck in your Trading; And May the force of volatility be us!

Best Regards,

E-mail : Patrice@stockbarometer.com if you have any questions about this trade or any other questions or comments.

 


 

Patrice Johnson

Author: Patrice Johnson

Patrice V. Johnson
The J.E.D.I Way

Patrice V. Johnson

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