Consolidate, try not to hate, love your mate

There wasn't much action in the major indexes today as we kind of churned after a huge day yesterday. I did notice a nice bear flag at noon that met its target. I've been playing around with Fibonacci retracements on flags lately, and I've notice that they often provide concrete areas to place stops.

In this instance, there was a nice doji around the 50% retracement that provided a good entry. Placing a stop just beyond the 61.8% retracement would have provided a nice risk/reward ratio.

Let's say you sold short at the 50% retracement ($69.70) and placed your stop 10 cents above the 61.8% retracement at $69.89. That gives you 19 cents of risk.

The trade worked out and your exit would have been at $69.15 giving you a 55 cent profit or 2.89 times your original risk (of 19 cents).