How to Trade the Short Side in This Textbook Uptrend

[Trading With Larry Benedict]( How to Trade the Short Side in This Textbook Uptrend By Larry Benedict, editor, Trading With Larry Benedict After a two-year rally that generated a 75% gain, the Invesco DB Agriculture Fund (DBA) topped out in May last year. From there, it took just two months to fall 16%. DBA tried to rally off its July 2022 low but then rolled over again. It spent the rest of 2022 drifting lower. Yet all that changed in January this year. A fresh upswing in buying momentum caused DBA to rally strongly. Today, I want to check in on that rally and see how things might play out from here… Recommended Link [ATTENTION: Digital Dollar Could Send this $0.25 Play Skyrocketing]( [image]( In just a few days, the U.S. government could announce [this mandatory recall on the U.S. dollar…]( And replace it with a new digital dollar. And that could send [this $0.25 alternative investment skyrocketing.]( This is the same type of investment that’s already attracting the attention of legendary investors and billionaires like Elon Musk, Mark Cuban, and George Soros. [Click here to get all the details before it’s too late.]( -- A Classic Bullish Pattern On the left-hand side of the chart below, the 50-day Moving Average (MA, blue line) shows the end of DBA’s downtrend. The 10-day MA (red line) bullishly broke above the 50-day MA in late August. But that move ultimately failed. DBA rolled over and headed lower. Invesco DB Agriculture Fund (DBA) [chart] Source: e-Signal That steady fall coincided with the Relative Strength Index (RSI) falling below support (green line) and tracking in the lower half of its band. Yet as we came into 2023, that negative momentum started to wane. DBA’s down move reversed. And the RSI made a series of higher lows (red line) from just above oversold territory (lower grey dashed line). From there, DBA made a fresh high at ‘1’ before retracing. The RSI also reversed (left orange circle) from near overbought territory (upper grey dashed line). From there, though, DBA developed into a textbook uptrend. The higher low at ‘2’ turned into a higher high at ‘3.’ Then DBA again retraced along with the RSI (orange circle). This pattern repeated with DBA’s move from another higher low (‘4’) to a higher high at ‘5.’ Take another look: Invesco DB Agriculture Fund (DBA) [chart] Source: e-Signal Throughout this uptrend, also notice the action of our two MAs… The 50-day MA has been steadily trending higher since the rally began. The 10-day MA has accelerated above the 50-day MA with each new leg higher. And DBA’s recent move higher from ‘6’ is seeing the same pattern play out. Yet DBA is now trading higher than its initial spike at the start of the Ukraine War. It’s within a dollar of its May 2022 high. So what am I expecting from here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Potential Mean Reversion DBA recently broke above its recent higher high at ‘5.’ So for now, its bullish pattern is still intact… We’ll be able to gauge the strength of DBA’s ongoing rally by the rate at which the 10-day MA accelerates above the 50-day MA and by the action of the 50-day MA. But we’ll need to keep a watch out for any pullback. The RSI has recently gone into overbought territory (red circle). And what happens around here will be key… If the RSI reverses – as it has throughout this rally (orange circles) – then DBA could lock in its next higher high at ‘7.’ That reversal could then set us up for a potential mean reversion trade to the short side. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Traders who choose quality over quantity are often the ones who’re able to make it over the long run. And several readers wrote in to share their experiences with the results. Dear Larry and team, thank you from a very happy subscriber. I love this strategy even when it's quieter with reduced volatility. At times like this, I especially appreciate you going for quality, not quantity of trades. Far better to make fewer trades and get them right than max out on the losses. I am enjoying trading a bigger contract size now that my account has grown over the last 7 months. Keep up the great work and I am so happy to have found this product. – Tony B. Dear Larry, I joined your S&P Trader service in early March this year, and it has been a great success. Therefore, I wanted to thank you for your guidance and your great signals. I am a seasoned former banker with 25 years of Capital Markets and Risk Management experience at the highest level from top international banks, but what I've learned and gained from you is astonishing… I have been increasingly successful with this strategy, allowing me to increase my credit spread contract sizes from initially 1-2 to 10-15. I am very grateful to have learned about you and your unique trading style. You, complemented by other signal providers, have provided me with a great lifestyle outside the banking world with more time for family and a great income. I am planning to grow my contract sizes further (in line with my growing capital), build sufficient wealth and retirement funds for me and my wider family, and also do good on the largest scale possible. You can count on me staying a happy customer of your service. – Csaba D. Hi Larry, I’d like to know the win/loss ratio YTD. I just started trading this program this month (July 10) and am doing very well, thanks. I have been trading 5 contracts three times and once 10 contracts. Keep up the good work. – Stanley W. Hi, Stanley – The S&P Trader has an 81% win rate so far this year. Great update. I now know what your objective is, and it sounds good to me. I am happy with our P and L. I look forward to a profitable future. – Paul S. Thank you to everyone who writes in. Send your comments to feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Make 2023 all about investing for your retirement]( In this video, Market Wizard Larry Benedict reveals how to make all the money you need... In any market... Using a single stock. And he’s giving you access to the top strategy that could put 2023 on the right track. [Click here to watch the video.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. 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