Intraday Bear Flags Galore In DIA

I’ve honestly never seen so many valid Bear Flag trades in a single intraday session.  Let’s see all these flags and view the intraday structure for February 26’s trading session in the DIA (DIA).

The day began with an initial gap, and though the first play perhaps should have been a gap fade, your trade was likely stopped out as the gap initially filled 50% before making a new high and then filling in such an awkward fashion.  For research purposes, the day will go down as a filled gap.

At 11:00, there was a prime shorting opportunity as price completed a “Three Push” Reversal Pattern (excellent example for future reference) on a Negative Momentum Divergence.  As if to make the trade clearer, a shooting star formed just after a doji - these tend to be high probability reversal patterns when other reversal signals confirm them.  Always use a tight stop when trading counter-trend.

Price then began its rather awkward descent into new lows, forming multiple bear flags back to EMA resistance.  Notice the dojis that formed on most of these patterns as price retraced back to the 20 or 50 EMA each time.

Perhaps the best trade of the day was the 12:30 reversal back to confluence resistance - the Cradle Trade - via the 20 and 50 EMA crossover.  The target was a measured move down which also corresponded with two other confluence points:  The 200 SMA and yesterday’s close (not a bad idea to put on a long trade to play the possible retracement back up… again with a tight stop).

Price floundered about this level before breaking sharply lower out of consolidation into the 3:00 hour.

Price ended the day on yet another large-scale bear flag into new lows.

I suggest printing off a copy of today’s intraday action - what an interesting day it was!

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