Shocking and Stellar Reversals Today in All Markets

I assume very few of us saw THAT coming!

What began as strong pro-trending movements this morning reversed violently into counter-trend reactions.

Let’s chart the short-term trends, today’s morning action, and the shocking reversals that busted the trends:

For some perspective, take a look at this morning’s “Treasuries and Gold” update post.

In quick summary, Stocks continued to trade lower but violently gapped down and reversed higher today.

Gold (@GC), US Treasury Notes (@TY), and the US Dollar Index (@DX) all had been trending higher, all gapped up this morning, and all violently reversed under their opening levels by today’s close.

I don’t intend to discuss the intricacies of why or how this happened, but instead call your attention to these correlated trends and sharp retracement/reversals today.

It underscores our favorite trading quote:  “IF something should happen but does not, THEN it often leads to a larger movement in the opposite direction.”

When traders bet on logical trends continuing but instead price fails to continue, it leads to big reactions the other way as traders rush to limit losses.

For savvy/nimble and aggressive traders, the reversals can give rise to large potential intraday profits.

We cover these markets for trend and trading signals along with Gold and US Treasuries (both of which continue to trade higher today) in our Weekly Member Strategy Planning reports.

Even if you only trade one of these markets, you benefit by comparing and contrasting money flow across the markets in terms of Risk-On and Risk-Off signals.

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).