It did turn out to be a 90% up day and as a result the markets did get into overbought territory so this would normally bring about a pause day for the following session. But then Bernanke is supposed to double-speak something tomorrow so who knows just what might happen.
This trade, which I was certain was about to backfire on Monday, is now up 5.8%, less commissions. In the process the RSI on the 60min chart has pushed just above 70 and this means that $SPX/SPY/SSO aren’t about to go much higher before there is some give back. It might be little more than a sideways move for a day or two, but it could also completely reverse. Since I believe this current bounce to be counter trend, I am getting ready to take profits sometime tomorrow, maybe at the open.
The idea behind this trade was to illustrate the 60 Minute Trading Strategy in real time with real $. I follow and employ this strategy many times throughout the year but and I just wanted to show how it works.
This pattern of oversold and overbought RSI’s in the 60min time frame repeats over and over again. Not every trade that employs the 60min strategy will be successful, but many are. However, if you should ever decide to give this strategy a shot, you do so at your own risk.