Mikula Forecasting Company

MarketWarrior: Swing Projector Type #2 Sell Signal

This discussion uses two charts of the 5 minute DJIA symbol $INDU to explain the Swing Projector Type #2 Sell Signal. This sell signal uses two indicators: the MarketWarrior Swing Projector and the Bollinger Plus. The first chart below shows these two indicators applied to the 5 minute chart.

The Type #2 Sell Signal has four parts. First a sideways movement in the price action must occur. I have drawn a box around this sideways price action and labeled it "Sideways Movement".

Second, the Swing Projector "Warning Pivot Symbol" must occur. The Swing Projector warning symbol indicates that the conditions for a top have been met and you should start watching for a top pivot. This warning symbol is the red downward triangle with the letter "T" inside.

The third part of this sell signal occurs when the price action moves above the top line in the Bollinger Plus.

The fourth and final part of this sell signal occurs when the price falls back below the Bollinger Plus top line. When this four sequence of events occurs the Swing Projector Type #2 Sell Signal has occurred and you should look for the best opportunity to sell short.




The next chart shows what happened after the Type #2 Sell Signal was given. It took several bars before it was apparent the price had turned down and then the price moved down quite a bit. The goal of this sell signal is to find swings that are large enough for a swing traders to trade profitably. You can see that after this Type #2 Buy Signal there was plenty of opportunity to enter a short position.