#15A MARCH 1, 2012 WEAK ACTION DESPITE CORRELATED MARKET STRENGTH
The Euro had been strongly correlated to stock market (e.g., NQ). Then market witnessed a downswing and consolidation, even though NQ had moved to new high for upmove. This seemed like extremely weak action and went short. Trade worked. Liquidated less than two weeks later on lowered stop at 131.39.
#15B MARCH 9, 2012 WEAK ACTION DESPITE CORRELATED MARKET STRENGTH
Very similar to trade above: market witnessed a downswing and tight flag consolidation near recent lows despite NQ moving to near highs of upmove. The market stayed in very tight flag, even as NQ moved higher through the day. The inability of the market to even break out of narrow flag after a big downmove for the day even with the correlated market moving higher was extremely weak action. Went short another unit, even though originally had planned to take profits on first unit not that much lower than where second unit sold. Market initially broke and lowered stop to breakeven and was stopped out.
Lesson: Weak (strong) price action when correlated market is strong (weak) can be sell (buy) signal, particularly if accompanied by downswing (upswing) and consolidation.