How We Hit Paydirt on the Regional Bank Collapse

On Monday, we issued an intraday short swing alert on CMA on the Hit and Run Private Twitter Feed:

As part of the regional banking sector, CMA had been hit hard and had bounced but still remained water-logged below a Breakaway Gap in March.

Markets play out in 3’s and CMA was in its 3r^d rally attempt since its spike low on March 13.

3 Drives To A High and 3 Drives To A Low often market turning points from which fast moves play out.

CMA had carved out a 3^rd drive to a recovery high on  April 19 and rolled over.

On Friday, CMA had turned its 3 Day Chart back up.

In strong downtrends the turn up of the 3 Day Chart often defines a high just as a turn down of the 3 Day Chart in strong downtrends often defines a low.

Friday’s turnup in the 3 Day Chart defined a high.

CMA attempted to push higher on Monday but tailed off where we issued are sell alert.

Part and parcel of the sell setup is that CMA was rolling over from a backtest of tis declining 20 day moving average for a Holy Grail sell signal as well.

Tuesday Hit and Run members hit pay dirt dropping over 5 points.

Importantly, underscoring the short-side setup is that CMA was poised to snap a trend line connecting the March 24, April 5 and April 25 lows.

As offered above, markets play out in threes and when the fourth time through almost always delivers a big move: you don’t typically find triple bottoms or triple tops so failures below and breakouts above 3 point trend lines offer solid risk to reward setups.

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