Prepare to Pounce on Some Short Trades

Even though I chose this week to look at retrace short trades, I hope you recognize that these are trades that will come along if the "slow crawl" thesis I have advocated for weeks continues to play out. The desired entry points on all these short ideas are higher in price, and the time to prepare for them is now. If the slow crawl north doesn't materialize, then the trades will never come to fruition. In the meantime, you have to prepare and be ready in case the opportunity arrives.

So today, I'll take a few minutes to talk about a different short trade setup that I like a lot. For this short setup, you are looking for a gap down that eventually trades back up to the gap area. If you read my "earnings retrace trade" pieces earlier this year, you recognize this as essentially the same trade -- just upside down. The gap could be an earnings miss or lowered guidance or any number of other events, but irrespective of what causes it, volume expands, price drops, and a gap is left....618 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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