CAT Follow Up

There's been a couple of posts on CAT, but the original idea best expresses the trade idea (click on link)

Here's where CAT stands now, don't forget to check on earnings:

 The idea was to let CAT bounce up to you and short into strength, there's a couple of resistance zones that have been broken which is what we wanted to see. The candles of the last day or two have been fairly weak momentum wise.

 Here's the 5 min chart which has been in confirmation of the move up which was expected, we are now starting to see the distribution of tis cycle.

Remember that in the original idea, an up cycle was already in play last week until the S&P leak on Friday caused the market to go short an prematurely end many cycles. The entire idea was based on the notion that Wall Street would try to recoup lost ground and finish the cycle up. This 15 min chart has been in confirmation at the green arrows and is now starting to show distribution. Distribution occurs into demand/higher prices, so if you like the trade, you can wait for a bonafide price reversal or start accumulating short shares. You probably don't want to accumulate more then 50% on your intended position and then add the other 50% on the price reversal confirmation. Personally I wouldn't mind starting to accumulate shorts here, especially on any intraday strength. Make sure you have a stop zone and it should be higher then present prices as we are seeing the start of distribution.

If you have any specific questions, feel free to email me.