The Proshare’s Ultrashort S&P 500, SDS, displayed an excellent setup and entry following Dr. Elder’s Triple Screen.
As a refresher, the triple-screen method looks at a long-term, intermediate term, and a short-term setup. The long-term chart, for my purposes is the weekly chart, and the intermediate chart is the daily chart. Setups are based on the previous day’s high and low.
SDS Weekly Chart
The long-term chart for the SDS, showed that, despite, a bearish looking trend, the trend was reversing. The MACD showed clear divergence from price over the last several weeks. This indicates that the long-term bearish trend was coming to an end. This represents our first indication that a trade may be coming.
SDS Daily Chart
The intermediate term chart, the daily chart, should have prepared us to enter the market. Using the Elder Force Index as our indicator, we should have been prepared on Friday to enter the trade. The oscillator fell below the zero signal line. At which point we should have entered a buy-stop at 53.95 with a protective stop-loss at 52.60 before June 15th’s market open. The buy-stop trade would have been triggered around the market open.
This is more for quick informational purposes of the types of setups provided by the triple-screen method.
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I am an amateur trader and investor with over 15 years experience in the stock market. I was bred to be a fundamentalist and followed fundamental analysis until 2009. Following the 2007-2008 bear market, I began to shift from a buy-and-hold strategy to trend-following techniques.