Shorting Setup for Playbook

From BCLUND

http://bclund.com/?p=5523?utm_medium=related_plugin&utm_campaign=related_plugin&utm_source=bclund.com

1. The overall stock market is overbought, in a trading range, or trending down, not breaking out or oversold, and
2. The stock I am shorting–its industry is in a downtrend, and
3. The stock I am shorting has entered a downtrend itself.

Look for certain chart patterns (and these apply on any timeframe). I want to see the stock first move in a “false” direction, breaking out to the upside, then reverse and hit a new low for the day, then when it tries to bounce back and rally towards that daily high, I enter the short position as it approached that high and place a stop from .01 to .20 cents above that day’s high price.