Click on the chart to enlarge it.
Here we've dropped down to a 113-minute intra-day chart, which is one-half the full day session. There are several Ocean lessons here that will help us build an unshakable case for a trade.
First, notice the NMA moving average band pinch (on prices), leading into the Cross Kiss ZeroHit on the 27th and 28th (labeled Tight NMA Band Pinch).
We have an Ocean tool that quantifies the degree of NMA band pinch that is occurring and although to conserve space it's not displayed the bands have contracted down to their lowest level since the end of January!
This is a very powerful setup that should lead to a quite dramatic and durable decline should it get underway. Also, note that at the time of the Cross Kiss ZeroHit, the Fast NMA has cut below the NMA and prices are finding good resistance at the NMA.
Secondly, notice that the first ZeroHit on this chart (after the three-day higher timeframe's signal of the 10th through the 18th) is occurring here on the 27th and 28th as a Cross Kiss ZeroHit, a very persuasive formation.
I'll address the issue of the time lag between the 3-day and 113-minute signals in a moment. The important thing to note here is that the ZeroHit is a Cross Kiss, occurring after NMC has spent three weeks above the zero line. The Cross Kiss is one of the more potent Ocean setups and should lead to a dramatic decline if an entry is triggered.
Note also that at the time of the Cross Kiss ZeroHit, NMS (bottom pane in dark cyan) is below zero and meeting resistance from its Fast NMA (in blue), which in turn is below the NMA (in red). All of these formations imply a high probability of a large breakdown immediately ahead!
The Cross Kiss ZeroHit setup triggers an entry one bar after its occurrence and prices begin their descent.
And what a descent it is! Note how each trend direction thrust powers on to a new low for the move, while all counter-trend reactions are swift and shallow. That's exactly what you would expect when a major trend exerts its influence on shorter timeframes.
Now that we're in, and after our analysis has paid off for us, what do we do with this trade?
(This is the end of Part 7. Go to Part 8.)
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