Today’s play is not dissimilar from yesterday’s.

After seeing the break of the triangle, I watched the volume closely to make sure that it wasn’t running away or anything. Then I calculated and drew my target line by projecting the max width of the triangle downwards from the breakdown.

Prices practically dropped in a straight line to the target area. Typically with a fade, I’ll just have a limit order waiting at my desired entry price. But when I see prices dropping really rapidly, then I like to get a little more confirmation first before taking the play.

Here I got what I was looking for when prices rallied through that very steep trendling right in the vacinity of the target line. Also note that the TRIX had also just reversed.

The play also set up a little mini NYSE-TICK Fade. While true it is not as solid as yesterday’s -1000 TICK reading, based on where the TICK had been ranging for the entire day up to this point, it was practically just as good for this sharp decline to -500 was a far cry from the prior low of -100. This is where you need to keep an eye on the day’s history and range. Having spent the majority well north of the 0-line, a foray down to these kinds of levels are definitely fadable with other confirmation.

So I entered 765.50. The natural target was the base of the descending triangle. I cut half loose at 766.50, a few ticks below the base. I then brought my stop to break-even to see if I might be able to get a little more with it; I didn’t. I ended up closing the rest out for a half-point profit a few minute later.

Remember, that when targeting, you don’t want to always take your profits right at the target zone for there will likely be a number of people thinking the same thing you are. That is why when the margin is wide enough, I often opt to simply go the conservative route and take my profits 2-5 ticks below the target area, depending on how wide the move has been…just something to keep in mind.