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THE DOUBLE REPO SIGNAL FAILURE
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First, you must have a Confirmed Double RePo, as shown in Chart 6-10.

DOUBLE REPO FAILURE

•  The Double RePo signal fails and is negated when the closing price exceeds the
Fibonacci '*' level. This is your signal bar. The expected subsequent action should be
strongly up.

•  Your exit is at a significant Logical Profit Objective or a Confirmed Trend signal as
defined by the 3X3 that does not confirm the action expected from the Failure.

Note: This signal is one of the few instances when you would reverse your original position. It would also be acceptable to aggressively enter (initiate a new position) against the high of the Double RePo Failure signal bar, after even the smallest of pullbacks. The point is, this is a Directional signal. You don't play with it. You get out of the way and go with it! In Chart 6-10, we clearly have a Double RePo which fails by exceeding Point '*'. Once you're in the trade to the long side, you have two ways to exit. Point COP (not shown) would be your Fibonacci precalculated, profit objective. Penetrating back below the 3X3 on close is your protective exit. This protective exit could turn out to give you a profit or a loss on the trade, depending on when and where price action crossed the 3X3. You could also use the stop placement methods discussed in CHAPTERS 8 through 11. Regardless of alternative tactics, the signal stays in play until a significant Logical Profit Objective is achieved or you get a Confirmed Trend against the anticipated Movement.

FREQUENTLY ASKED QUESTIONS:

Once the Failure is in place, how aggressively do I treat it?

You immediately get out of any existing positions that are counter to the action anticipated by the Failure. You may initiate new positions aggressively, or by criteria yet to be described (dropping the Time Frame and entering at a Fib retracement or Confluence area).

Can I use the MACD/Stochastic Trend indicator to determine the protective exit rather than the 3X3, if the Failure doesn't go my way?

Yes, a Failure should move now, and keep moving. If it doesn't, something is wrong.

Chart 6-11 weekly bonds has two Double RePo Failures as well as a Double RePo. I've identified one Double RePo Failure and the Double RePo. Can you find the other Failure

DOUBLE REPO FAILURE

Chart 6-12 shows a Double RePo Failure in the daily bund. The price action to the right ofthe top does not qualify as a Double RePo, since there was not adequate thrust. Note how nicely the 25X5 contains long term Trend.

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