Saturday, August 25, 2012

Buy the Dips

US stocks rebounded from it's premarket doldrums to end 0.64% higher. I was stalking the sp500 and eur/usd pair to see if there was a trade on the long side.
Below is the image of one of my favourite setups - a downtrend that is broken to the upside, and then a test with a higher low near the trend line break. The second point to the price increase is the key levels confluencing - 1400 on the sp, 1.25 on the eur/usd, and 1.04 near the aud/usd. The downside price action tried to take the prices below these key levels, but retook these lines by the opening of the US session, so I took 10 contract position in the sp500 at 1400.3 and 1 lot position lot at eur/usd.
This is the typical buy the dip price action that we would expect in a bullish market.