"Ineffectual Interim" examples

I call this reversal setup the "Ineffectual Interim." You'll understand why after watching the video. Okay, I'll spoil it -- it's because the correction is ineffectual (there are specific clues) and that makes the prior extreme's retest likely to reverse. Sharply.

It doesn't develop often. But when it does, there tends to be multiple sightings around the same time. That's the case here, with both the 30-year Treasury and Crude Oil futures markets forming my "Ineffectual Interim" setup. 

The setup can be very reliable, as it was in these instances. Just as important, the pattern teaches us about market behaviors.

This is not a long-term play. The influence should be obvious soon after retesting the pattern's prior high or prior low. Without another pattern in-play to reinforce the reversal setup, the original trend might resume.

The video depicts the ultimate intraday reaction to the setups. You can view the pre-reaction morning description here.

Posted to Rod David's Futures Market … on Oct 16, 2014 — 3:10 PM
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