(Click on image above to enlarge it.)
Here's a weekly chart of Crude Oil, showing an NMC Cross Kiss Zero Hit sell setup on the week ending 9/26/08. That setup confirmed the following week, and crude prices have declined from above $100.00 when the Zero Hit formed, to below $65.00 as of late October. It's worth noting that this weekly Zero Hit developed after the high in the market in July. When we look at the daily chart, we'll see that the bearish setups occurred sooner after the top was formed, allowing even earlier entry possibilities.
This is somewhat common, in that signals on a weekly time frame take longer to form. Trades can be initiated based on the messages from lower time frames, and then when the high time frame(s) kick into gear, the moves are usually exaggerated as was the case here with a $35.00+ move coming in less than 5 weeks. As we'll see on the daily chart, when two time frames set up concurrently, the thrust can be quite dramatic.
Note that the brief counter trend rally in prices that produced the Zero Hit met the resistance of the Ocean Fast Moving Average at the time of the Zero Hit (green line on prices). Also, NMS had declined below both its moving averages and below zero during the very early stages of the market turning bearish, and generated the familiar "hook" pattern relative to the Fast Moving Average just as the Zero Hit was forming.
The BTX trend indicator (not shown) was above 35 and had pulled back to its lower standard deviation line and then turned up in conjunction with the Cross Kiss setup and entry. Additionally, the BTX 2 Line produced a change of dominance with the red line touching or crossing above the green line (signifying a bearish market mode) on three occasions.
One last point - notice the timely NMC Zero Hit buy setups that occurred in August and November 2007 (magenta arrows) while the market was still in its bullish phase.
Now let's take a look a Crude Oil Daily chart to see how setups on that time frame coincided with the weekly chart setups:
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