Trading UWM - Ultra Russell 2000 Proshares 033108

Today was a fun trading day. Why was it fun? Well it makes my life easy when trading patterns pop out that are clean, and better yet… work!

I was expecting some type of quarter end markup, but you really don’t know how much that will affect trading. After stalling last week, and declining for three days, I figured the bulls would put up some type of fight here.

You can look at the Nasdaq or many of the ultra long ETFs, and you’ll see the same pattern as UWM here. The 15-minute bar shows UWM starting the day with a bullish candlestick that engulfes the previous candle. We get a retracement followed by the higher high buy signal over 47.06. Using the bottom of the previous candle as a stop gives about .30 risk or R.

Where’s the target? Drop down to the 5-minute chart and you see UWM head straight to the 200ma where it stalls. Note that it also stalled at the 50 daily moving average too. There’s a few month’s of supply above. It takes time to push through that.