Every trader has had this moment. You are in a good position, price starts sliding, it breaks the level you were leaning on, and you have no idea whether you are watching a pause or the top. I spent years getting that call wrong in both directions.
What changed it for me was having something that measures momentum instead of price. When the Moxie Indicator is above zero, there is still energy behind the move, and a dip into support is usually just a dip. That combination, positive momentum with price sagging below the 50 SMA, is what I call the trampoline setup. Flip the signs and you get the inverse, which is the one that keeps you from buying a bounce that was never going anywhere.
I go through both sides here. $UMC finding a low after a long downtrend. $NBIS dipping into earnings with momentum intact. $MSTR, where my breakout entry faked out and price dropped back under support, and momentum is the only reason I did not panic out before it ran. Then the other direction on the $SPX, $GDX and $IWM, where price kept poking above the 50 SMA and momentum never confirmed a single one of those bounces.
The setup is fractal. It reads the same whether you are looking at a short intraday chart or a weekly one, which is why it ends up being the backbone of most of what I do.
Full walkthrough with the charts is in the video.
Your Profit Pilot,
TG Watkins
Jon McKeever and Melissa Beegle go live Wednesday at 6 PM CT on Trendy Precision, the tool that tells you when a good setup is actually ready to trade. Save your spot before it fills!
