Consider a Contingency Plan

The question isn't does Fed Chairman Bernanke have an exit strategy, the question is do you? Confronting the issue and developing a plan does not imply bearishness, it is simply part of a successful trader's process. Identifying some technical line of demarcation that readjusts your trading outlook is the first step in developing a contingency trading plan.

S&P 500 Source: StockCharts.com View Chart » View in New Window »

The weekly chart of the S&P 500 includes the Relative Strength Indicator and Chaikin Money Flow, which are overlaid with 21-period signal averages, and the Moving Average Convergence/Divergence indicator. I have used this chart many times and coordinated crossovers in the indicators have marked short- and intermediate-term turns in the broader market. Last week, the RSI crossed below its 21-period average and both the MacD and Chaikin indicator are just above their signal lines. Another coordinated move in these indicators and a price action trigger, like a weekly reversal candle, will turn my intermediate-term outlook negative....313 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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