PPS P 3 1/2

• Alert applied first to the 30 minute chart, and then to the
• 60 minute chart after the 30 minute chart goes through the confirmation
• process.

 

• Bearish
• divergence signals an undercurrent of change brewing (seen on RSI) or
• Wm%R)
• RSI
• indicator to point and start heading down.
• Negative
• candle on the chart, and the 8 EMA moving down and below the 13 EMA.
• Black
• PPO and ADX lines to be close to each other.
• PPO
• histogram blocks to be narrowing downward.
• ADX
• line pushing away from black PPO line and -DI line to be pointing and
• moving up, while the +DI line points and heads down.

• These should happen in conjunction with each other. These
• buy signals should be first applied to the 30 minute chart, and then to the 60
• minute chart after the 30 minute chart goes through the confirmation process.

 

• The
• PPO lines crosses down over its signal line.
• The
• histogram crosses the zero line.
• -DI
• crosses up and over the +DI line (wait for a -DI cross up before
• entering).

 

• Once the signals and confirmation signals have taken place
• on the 30 minute chart, you then look for the same alerts and apply the same
• confirmations to the 60 minute charts before actually entering a trade. After
• entering a trade, watch for the P 3 ½ pattern to go through the stages as it
• unfold. Look for the PPO and ADX lines to spread apart.

• Look for these alerts on the 60 minute chart. Remember there
• is often a wobble on the PPO that will produce some of these alerts, so look at
• the PPO to see if that is what it appears to be. A second or third area of
• weakness (wobble) is likely to be the true exit.

 

Alert: 1. RSI rises from oversold area.

•             2. 8 EMA rises
• closer to 13 EMA, appears as if it might cross.

•             3. Positive
• candles (in conjunction with other alert indicators).

•             4. WM%R rises
• above -80.

•             5. PPO
• histogram blocks begin to narrow upward.

• 6. Black ADX line flattens or curls
• downward, and +DI starts to head up and –DI starts to head downward.

• 1. Crossover of the PPO over its
• signal line.

•             2. Cross of
• the 8 EMA over the 13 EMA.

• 1.     ADX and PPO come close together as they mimic each
• other.

 

2.     –DI Rising.

 

3.     PPO crosses down and over its signal line.

 

4.     –DI crosses +DI and eventually the ADX line.

 

5.     PPO wobbles against the signal line.

 

6.     Spread apart of PPO and ADX lines.

 


Exit – Rollover of ADX line and drop of –DI.