Wednesday, December 28, 2011

Looking for a pullback to go long BGZ

I like BGZ for taking advantage of a swing type move, BGZ is a leveraged inverse or bear ETF for large caps (read Dow-30 stocks) and when the market really falls apart, there won't be safe haven trades in the large caps, everything gets dumped, so BGZ is in good position value wise.

 BGZ daily 3C sees accumulation at the lows, note the break below the support level yesterday as I have mentioned, head fakes are the last thing we see before a reversal. The white boxes in price are approximate accumulation areas.


 The 60 min chart did a LOT of positive leading the last 2 days, starting with the break below support, this generates supply that can be accumulated without moving price against larger positions being taken.

 The 30 min chart confirms, also note the parabolic spike in the yellow box on price...

 The 15 min chart is now in line with the others, good confirmation and look at the leading divergence on yesterday's break of support.

And the 10 min chart is similar.

Being an oversold bounce is probable, I would like to enter BGX on any market bounce as a swing length trade that takes advantage of a break down in the Dow as it still remains a safety trade as small caps underperform.

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