Sunday, March 18, 2012

18th March 2012 - weekend setups

Two possible setups have presented themselves over the weekend.


I think this is a good quality setup. An inside bar formed on Friday's close. This looks like a good opportunity to short silver.

In favour:

+ around resistance
+ suitable R:R to next support level
+ with the trend (bearish)
+ similar signal in gold
+ break of inside bar's bottom clears resistance/support


- inside bar is not at an extreme end of the previous bar


This setup is quite messy. An inside bar has similarly formed on Friday's close.

The current resistance level isn't well defined, so I've decided to use a zone instead. Going long here looks a little problematic as breaking the top of the inside bar will not put price beyond the resistance zone, increasing the likelihood of a fake-out.

In favour of a long:

+ with the trend
+ suitable R:R to next resistance level

Against a long:

- not an extreme end of previous bar
- break of inside bar's top will not clear resistance zone
- will be trading into 1.5000 (psychological benchmark)

In favour of a short:

+ suitable R:R to next support level
+ break of inside's bar bottom clears current resistance/support
+ trading away from 1.5000

Against a short:

- moving into "de-virginised" space on chart
- against the trend

This isn't a clean setup. Direction can move either way so I'll skip this one on Monday morning.

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