Tuesday 10/12/10 wrap up

The main weakness in the Trend/Osc system is a tendency to whipsaw, especially at trend changes.  We saw that today.  We may not necessarily be topping, but we did get a whipsaw.  The Dyn Osc broke below 80 late last night followed by prices breaking below the uptrend line early this AM (highlighted in chart) - so we had a sell signal.

I closed my long ES's this morning based on that signal but did not go short.  My plan was to wait for overbought conditions on several indicators I follow on a 5 minute chart, that situation did not develop all day.  With the new highs this afternoon the sell signal was canceled and the trendline and oscillator were reset.
Current Hourly ES Trend/Osc chart:

One thing that made me cautious on the short side today was the fact that the Daily ES Trend/Osc remains in bull mode:

The Hourly EUR Trend/Osc also generated a sell signal last night overnight:

I'm being cautious with this market as well for the same reason I was cautious with the ES today - the Daily EUR trend/Osc is still in bull mode. However, it is a little shakier than the ES as prices traded below the uptrend line all day.  If the strength exhibited today in the EUR pushes it to new highs tomorrow the uptrend line will be reset to connect the low at the start of the trendline with today's low.