DE Follow Up

So as I just posted, I'm comfortable with a half of normal size position (which would be speculative size normally although I don't view this as a speculative trade) and leaving the other half for stronger signals or a better entry. This is NOT Dollar Cost Averaging which is a losing strategy whereby you have a losing position and you through more good money in after bad to try to reduce your cost. Phasing in to a trade is part of your risk management plan before you ever enter the trade.

I DO NOT support Dollar Cost Averaging. We have a saying, "If you find yourself in a hole, STOP DIGGING!" Chances are you can make up the losses in a much better trade rather than throwing more money in to a losing one.

That said, here's DE... Please take a look at the original trade idea, what we were looking for, etc. so you have a better idea of how this all works, even if you are not interested in the trade idea.

 DE made it above one of our target zones, this is where we wanted to look at the trade, let DE come to us rather than sit through a lot of draw-down. The resistance area was an obvious target, again the reasons are in the 2-part article, Understanding the Head-Fake Move.

 The intraday 10 min 20/20 Bollinger Bands looked like DE was getting ready for a directional move, it's just starting to break to the downside of those bands, but they are intraday so they aren't the strongest signal, but I thought with everything else, now was as good a time as any for at least a phased in position.

 Even MoneyStream which isn't very sensitive on intraday charts, calls this negative divergence on the DE breakout above resistance and on a 60 min chart.

 Here's the 3C charts, 1 min from confirmation to a negative leading divergence

 3 min in a leading negative divergence

 5 min couldn't make a new high so it's default in leading negative position and today we see a leading negative intraday move. Note the accumulation right before the move and how did they know how the Fiscal Cliff Vote was going to go down before the weekend? Hmmm...

The 15 min is also in leading negative position with a relative negative divergence as well over the last 2 days.

DE should be a nice trade with a move below support (former resistance it just broke out above), that will leave quite a few longs caught in a bull trap.

Again, if we get a better entry or even stronger signals, I'd look at adding more to DE, ultimately I'd prefer it be a full size position and I think it has a chance to be a trending trade, not years or anything like that, but several months is certainly possible.