Click on the chart to enlarge it.
Now we've come down to a three-day chart in order to obtain a finer-grained picture. And we see that there was a ZeroHit setup that corresponds to the one that's present on the weekly chart.
Remember that the weekly setup began on the 7th and extended through the 14th without a qualified Ocean entry. This three-day chart demonstrates a ZeroHit occurring on the 10th and stretching through the 18th without an Ocean-based entry (entry rules explained in detail in the Ocean Workshop).
Meanwhile, a host of ancillary Ocean evidence indicates that this ZeroHit is setting up as a potentially strong signal should it result in an entry:
–Prices are finding resistance at the Fast NMA (labeled Fast NMA Resistance);
–Fast NMA is downward-sloping and trading below the NMA (also labeled).
–The NMM ROC is setting up for another potent Slingshot formation (see label in NMM ROC pane).
–While the chart doesn't show the full picture, the NMM ROC has advanced to an extreme reading not seen in more than 7 months. This, along with the fact that the same formation is occurring on the weekly chart, indicates a probable swift breakdown if we get an entry signal.
–The NMS (bottom pane, in dark cyan) is meeting the resistance of its NMA (in red).
–The NMA is itself downward-sloping.
All of these formations are what we like to see, so our last remaining task (greedy, aren't we!) is to drill down to an even lower time frame to attempt to truly finesse an entry.
Side Note: It's instructive to mention the earlier ZeroHits that occurred in Febuary and March (labeled on chart). While we're not focusing on them for purposes of this example, they both offered very strong profit potentials, with many of the same attributes being discussed in the May setup that we're currently analyzing.
Additionally, the mid-March ZeroHit was validated by the ZeroHit occurring simultaneously on the weekly chart. Dual timeframe analysis would have easily identified this trade setup and an entry would have been indicated.
(This is the end of Part 6. Go to Part 7.)
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