CAT Follow Up

Yesterday I featured CAT as a way of looking at the change in large cap performance, although yesterday small, mid and large caps all under-performed.

Some people like the idea, so here's some more on CAT

 I prefer wide stops on initial trade entries, they can be tightened later when the trade is moving in your favor. I see a small gap just above and above that is a resistance level, my initial stop would be above that resistance level although I don't think it is a very high probability of it being hit.

 The trend channel has held the entire uptrend without a hiccup, you can see where the stop out was to the left (red arrow) and as usual, there's some further gains but usually not worth the volatility as we are back below the stop out level. Th Channel's stop is close to the stop I like above, so I'd consider that as confirmation. It would be nice to enter the trade on some strength in a gap fill, but...

by the looks of this 15 min chart which went leading negative throughout yesterday, the chances of even that don't look great. You may want to consider phasing in to the trade, maybe 50% here and add if there's a little strength. Otherwise, add as usual to a trade that is moving in your favor on a correction.