We definitely took some heat from about 5:00am ET until the day session open. You can see it represented in the chart as the upper wick on today's candle. Having doubled my position last night, the unrealized loss started to look rather threatening. I'm thinking I can't believe such a great looking short setup is going to reverse and hit my Stop. But I just held on and sweated it out.
I was so thankful the way we closed the day session. We closed today's candle as a Doji, which represents indecision. Looking at yesterday's and today's candles, both Doji's, it seems we're bobbling between the 8ema and the Trend Line forming the bottom of the upward channel that started around July 21st.
But, both days we closed under the 8ema, under the Head and Shoulders Neckline (on the 4 hour chart in the previous post), and under the 20sma. Look at how the Stochastics are accelerating downward. Everything we've said indicating a downward trend is still in place. Nothing has been invalidated.
So we continue to tolerate the consolidation here, expecting a breakout down through the Trend Line and a close below it. At that point we either wiz on down to the target, or we temporarily reverse to test the underside of the Trend Line, then continue back down. Well, anything can happen, but those two courses of action seem the most likely.
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