TSP: How I Pinpoint Killer Trades
TSP is a recent IPO that triggered a Rule of 4 Breakout last week.
A Rule of 4 Breakout is a strategy I created in my Hit & Run books over 20 years ago that does a good job of pinpointing explosive moves.
It is a breakout over triple tops.
TSP ran up from 39 to 48 where it carved out a reversal bar on June 10th.
However, there was no downside follow through.
Follow through is key, Setups are a dime a dozen. Without follow through…what isn’t going down is often times going up (and vice versa).
This is how I developed my Keyser Soze strategy or a Reversal of a Reversal.
On June 11, TSP cleared the prior day’s reversal closing at/near session highs. This left a 180 buy signal as well.
Allow me to explain. On June 10, TSP closed near session lows, the following day it closed near session highs — within the context of an uptrend.
Consequently, on the close on June 10, we are staring two continuation signals in the face — a Keyser Soze (Reversal of a Reversal) and a 180 buy sign.
The Rule of Multiples (multiple signals perpetuate the idea of follow through) kicked into gear and TSP exploded on Monday.
But here’s the icing on the trade cake.
Checking my Square of 9 Wheel and anchoring to the 32 low shows that a full 360 degree move up (1 full rev or square) gives 58.
When TSP cleared 58 on Monday, it telegraphed it wanted higher.
The next square up from 58 is 66.
These relationships are depicted on the Square of 9 below
Green is 32 with 58 just above it.
Blue is the next 90 degree decrement higher at 66.
TSP was a heat seeking missile to 66 on Monday when it started to pullback.
I tweeted that it should be buyable for a trade from a backtest of 58.
TSP traded to 57.70 before rallying to 50 on the runoff for a quick Hit & Run play.
Let’s take a look at another Hit & Run setup for today, June 15.
CRCT more than double from its late April debut running from 15 to 39 in late May ater coming out of a mini Cup & Handle.
Notice the explosive move from 29 to 39 after it cleared the May 17 reversal.
Keyser Soze was in the house (Reversal of a Reversal).
Friday, CRCT pulled back to test its 20 day ma for a Holy Grail buy setup.
A Holy Grail is a pullback to a rising 20 day ma within the context of a strong uptrend (or visa versa for a Holy Grail sell).
Yesterday, CRCT left a 180 buy signal and looks set to test prior highs.
Clearing 39 projects to 45 on my Square of 9 Wheel.
99.999% of traders have never even seen the Square of 9... let alone understand its potential.
Do you dare to be different?
