Tuesday, February 16, 2010
teddy bye and cheerio!
The other day, I was updating websites I manage and realized I've been posting and creating web content for 13 years! My active web participation started with with a 'personal site'-- bandwidth from my internet provider, earthlink at that time. If you are a web newbie and don't know much about the early days, this was a few years before
blogging software automated personal journaling. "Posting" was the most common way we communicated ideas, and posting popularity is still quite high, both at interest-based communities as well through blog site commenting. My primary interests at the time were publishing--
The Mystery Box being the fruit of those efforts, and of course, trading which consists of this blog as well as my
trading pages where I share all sorts of technical analysis based trading methods.
I began by swing trading NYSE stocks, my first stock trade was T and was a purely fundamentals based trade. I had a Mac at the time and discovered the lack of trading software compatible with Macs. I grit my teeth and bought my first PC since the early early days of a massive IBM/DOS machine. Now having PC-based software at hand, the evolution from fundamentals trading to technical trading was almost immediate.
I don't know if I ever mentioned that my interest in technical analysis came about through reading
How to Make Money in Stocks by William O'Neil. The link is to the fourth edition, which looks to have been enlarged and expanded from the more basic earlier editions. The
CANSLIM approach is simple, but like all trading methods, depends on the trader knowing his limits. Like all my endeavors, I dove in head first and whole-heartedly. I found my journals from that time and was astounded at the number of issues I was trading and the detailed notes I kept.
The first technical trade I shared with the world --at clearstation--was ODP. As The Bubble heated up, I was drawn to trading NASDAQ issues. It is odd to look back at my early approach. I analyzed the cash index (COMPX)to determine general market direction and selected issues from Investors Business daily for swing trading (3 day to 3 month type holds). I subscribed to the paper edition and kept all sorts of folders with trading articles, both technical and fundamental. IBD was wonderful at blending these two interests.
My swing trading days ended with the bursting of the bubble,
which I did indeed call at clearstation I used the FTEXX board as a sort of blog...Posts 2, 6, and 9 trace my move from fully long into fully cash. I was using moderate stops (7-8%) on my trades. I had nearly two dozen trades active and one by one, the stops were hit, I think six on one day. It didn't take a brainiac to see that something big was happening. My interest in stocks nearly completely vaporized and after a few months, I moved into futures.
I continuted to post at clearstation and in parallel, opened an account at stockcharts.com where I could plot Andrews pitchforks. I created daily pages with my trading ideas, downloading charts from stockcharts.com and inserting them onto my hand-coded-html pages at earthlink. I was very active on the clearstation boards then and had a rather large following. I was also voted the
best chartist at stockcharts.com for six months running. It was, looking back, a kind of facebook/twitter concept for traders. Both sites are still around, still successful, and many of the same people are still posting over there.
I grew to actually detest that COMPX index. I switched to NDX futures and continued to use technical analysis of the COMPX and NDX to place my trades. It worked but my disgust with the NDX grew to the point where I switched completely to SPX futures. On January 9, 2002, I logged my
first entry here at actio-et-reactio and shortly thereafter, I discovered
Ensign. Ensign charting is perhaps the only thing that might pull me back into trading, or at least technical analysis...that software is just the best. Using Ensign eventually lead to the
dacharts community. Then, one day a smooth-talking kiwi showed us
The Box and then came many happy years trading the INDU. This latter phase is condensed as my actio-et-reactio blog journalled my adventures with over 300 entries.
And this is the last "actio-et-reactio" post. I often think of my trading buddies-- sputnik, Alan, rabbit, and pk, as well as the many many correspondents I've had over the years. I don't reckon I'll ever again trade as actively as I did in the past. I view the analyses, calls, comments, and methods I've shared as a gift for that moment in time. Like a cake, it was lovely to look at, wonderful to eat, but once it's eaten, it's gone! I look forward to a new adventure and I hope it has even a half of the intensity, interest, depth, breadth, and appeal as trading had.
Oh, the reason it is the last post is that as of March 26th, Blogger will no longer support ftp blogging sites (like mine). I don't fancy doing a blogspot blog or having them host my blog, so I've decided to close out my 'market notes' blog, and most sad to say, my meanders blog. I've installed WordPress on my own site and hope to be posting thoughts to a new journal I call "Word Matters" in the near future.
It's been fun, especially all the very special and wonderful people I've met and called friends along the way!
teddy-bye and cheerio!
Ana Maria
(gads! all those words and nary a chart!!!! what to do? what to do? I may come back and annotate this...but I'll need to chart something first!)
later the same day...OK...here's an obscure chart analysis: VIX. VIX has to be one of my favorite obscure charting fascinations. It still intrigues. What is vexing about VIX is its relativity. The addage "VIX is High, Time to Buy, VIX is Low, Time to Go" works, but Low doesn't mean "lowest" or high "highest". It channels! I've written about this before, but there weren't tags back then. Anyway, here's a quickie from
stockcharts.com. My wager is some channeling (market chop) with perhaps a run at another high, which will fail. If you look at market indices, there is a MACD cross, but sub-zero, indicating a weak rally. That and RSI is now channeling under 50, indicating weak channeling at best.
Labels: chart-analysis, Journaling, sentiment
Friday, October 24, 2008
Boeing Company market geometry
Aside from the remarkable price action at the current bisect (which is also confluent with the "Alan Box 50% of prior 5 years), check out the resistance/support at horizontals drawn from prior 'strike call' date/price. (The orange lines)
Regarding the Alan box, price technically failed to hold that gray up-line. It is in an "outside flag" and perhaps the best prior instance is the similarly failed "outside flag" just above, after the 9/5 strike call. Talk about timing...the call came just at the time of the big market drop.
Labels: alan box, bisects-forks-medianlines, chart-analysis
Tuesday, September 23, 2008
$VIX hasn't backed off...
$VIX hasn't backed off from that little box it is making (on a daily basis) in the 30s. Looks to me it is coiling for another attack of the prior spike high. VIX is a sentiment indicator and the spikes are interpreted as "fear" indications. As a reminder, I'm thinking a trifecta of VIX spikes, similar to the 2002 group in the chart lower down on the page. That's a weekly chart, so it takes five of these daily charts to make one of those.
I'm thinking 2-3 weeks between each spike. The scenario are rally bumps from "rush to calm fears" money injections-- last week by Paulson and friends, and today from Warren Buffet-- paired with "no one buys that line" reversal sell-off slides. These latter bumps would be preceded by a VIX spike.
chart from stockcharts.comLabels: chart-analysis, sentiment
Thursday, September 18, 2008
the first VIX study, circa 2003 :)
I found it, buried on an old page with wierd links etc...I've learned a bit more about web navigation since then, thank goodness!
It's at the bottom of the page, but here is the chart, from the last days at stockcharts.com, along with the words I wrote at the time. The result was, in fact, a channel with a subsequent upside breakout. Will past be prologue?
This SPX/VIX study came about because VIX wasn't on its own consistent enough to follow the 'VIX is low, time to go; VIX is high, time to buy' thing. I noticed a few things:
(1)The ratio SPX price relative to VIX channels (lowest pane)
(2)Significant channel shifts happen when price is trending up or down
(3)SPX/VIX reversals are good swing indicators, regardless of channel position
(4)'Significant' tops & bottoms are accompanied by channel shifts.
(5)The direction of the 34d, 60d MA (Bollinger Band basis) needs to shift as well to make the SPX/VIX reversals significant
6/6/2003: SPX/VIX finally got out of the gutter channel and into the center turn lane. It hit the upper channel line & is reversing, perhaps a bit like Oct02 with the perhaps significant difference that the 34d MA is turning up and price tested and moved back up off the 60d MA.
I'd look for a strong move out of the center lane to confirm more up. Otherwise, it may repeat the Apr-Dec98 center channeling, which could bode well for a trading range.If this pull back drags it back in the gutter, well, bummer! just another bear rally.
Labels: chart-analysis, market-calls-dated, sentiment
Trader Vix
I could write a whole buncha words about VIX and the old adage, "VIX is high, time to buy, VIX is low, time to go". I did in fact write tons of words on this quite a few years ago, but couldn't find it with Live Search, so when I find it, I'll link it.
This is a very quick study showing VIX in the lower frame in comparison to the INDU. It is a weekly chart, which I believe is the most appropriate for a sentiment indicator like VIX. If you followed every little squiggly VIX low or high, you'd be a dairy maid, churning churning your account. The take-away are the thick orange and green line showing prior VIX/INDU high low clustering.
The first part of my fearless (ie, WAG) thesis here is that the old high (that big cluster of high VIX in 2002) is a very critical test. The current weekly close low has cracked that test, but there are two days left in the week.
I'm not at all suggesting this is an "investor" buy, although there may be a short reaction rally after three days that have set records not seen since 1998 in terms of net down.
The second part of my thesis is that VIX, like the INDU test of the old high, must test its personal high from that same period (see the shaded red box showing the gap). That likely means more downside and a hammering of that thick orange old-high test with a few more spikes, similar to the past hi-volatility period. The potential target low in this WAG is 8000-- based purely on geometric symmetry. I'd hedge that, however, with what I didn't put on that chart, which is a horizontal line under that lengthy trading range from 2004-2006, at about 9500.
I'll revisit this over the coming months.
Labels: chart-analysis, Dow-INDU, sentiment
Monday, November 12, 2007
here's a cool chart
dave, a long-time trading aquaintance, has thoughtfully sent along a new kind of animated GIF: a trading chart! It was posted over at
dacharts by "av" and created using the
free Microsoft GIF Animator software. Thanks, dave!
Labels: chart-analysis, market-fun, trading-method
Tuesday, October 17, 2006
Follow-up: INDU & RSI
Following up on
prior post. The early action pushed the INDU hard into a mid-day reversal. (See inset on image) During that flush, "classic" RSI pushed thru the first (Oct 17th) trendline, into the next one down, and almost tagged the "Bump" line.
The midday reversal canceled all that and the close was on the second (Oct 20th) trendline. Notice that the fisherized RSI didn't make a perceptible budge.
So...still in strength, reaction down is still positively divergent (ie, pullback not full blown reversal).
Labels: chart-analysis, indicators, RSI
Saturday, October 14, 2006
VIX is High, VIX is Low...
the old adage is...
"VIX is high, time to buy
VIX is low, time to go"
But like many things, it is relative, to prior hi/lo to some extent, and to recent behavior. The later is why so many people have given up on VIX...having nearly flatlined into a relatively low range, they toss it out as if it's no good. However, using rsi as a helper to gauge the relativeness has still snagged the wee pullbacks on this Daily chart. It also works pretty cool intraday.
Labels: chart-analysis, sentiment
INDU Daily, an RSI study
Hey, how 'bout one of my own charts? :) Here's a study with "Fisherized" rsi and a classic, but fast (7-period) rsi.
There is already a negative divergence of the rsi related to the current high with respect to the rsi from the prior high (5/10/2006). It could resolve itself two ways:
(1) bust thru the prior resistance line
(2) reverse
The inflection window for either would be 10/17 - 10/20.
The Fisherized rsi is useful for hot trends, where it will stay pinned (OB or OS). It is a "do not fade til you see the whites of their eyes" type of thing. Even a "dip" below 98 could be just that, a dip. Full disclosure: I'm still only day-trading and using Daily charts for "big picture". I gotta say, though, I kinda miss swing trading sometimes.
PS-- not going to go into the rest of the chart voodoo, except to say you'll recognize the
Alan Box (Yellow is an annual),
rabbit's xSwing "big bollie" of 180, showing big time hot trend as price is riding high above it, and VolSum extremes, the Green/Red little arrows.
Labels: chart-analysis, Dow-INDU, indicators
Saturday, October 07, 2006
Bid/Ask & Equivolume
One idea that surfaced very quickly after Howard's introduction of the
new features was to highlight price having high Ask/Bid ratios. For my purposes, I color bars green/red for up down and when the Ask or Bid ratios are above 75% they go dark green/red, and above 85% they go yellow/orange.
"Big" volume always relative to surrounding price action. In this chart, price is near a "relative" top, the upper 180ma Bollinger, so big up volume may show over-enthusiasm, esp. as the BBands were pretty flat. I'd look for reversal sign, but lunch kinda got in the way. You can really see the low volume when the "twiggy" bars show up. Nevertheless, the alert trader got rewarded. Moral of the story: avoid pasta for lunch if you like to trade the afternoon.
Here's an idea:
Top 10 Chart Patterns and Setups for MarketDelta™ has a few links, in particular the MarketDelta Strategy Guide, that might give the volume trader a few ideas and strategies that can be used with the Bid/Ask and Equivolume displays within Ensign. Of course, MarketDelta™ clearly offers additional information in the display not in Ensign, but that's not the point. A student scrounges and scarfs all over the place!
[click for larger image]
Labels: chart-analysis, volume
Saturday, September 23, 2006
Trading & Lunar Cycles
Trading & Lunar CylesAs with any trading methodology, like with pudding, the proof is in the eating, or, does it pay out. You'll enjoy
this thread at elitetrader.com by "yoohoo", who actively uses lunar cycles in his intraday trading. I have a sneaking suspicion I have seen yoohoo's trading first hand over the past two years and, aside from any justifications of "why" lunar cycles work, his real time 'call' on the lunar trade is pudding proof: yoohoo simply applies the ideas in a way that pays. [
final charts, read the thread for commentary]
click to enlarge
Fiction and Lunar CylesTom Drake has, as he so often does, dished up something a bit off the beaten track: comments on a new "financial thriller" book.
Here is the full article (page down a bit for the book part). Here is a snippet:
The novel isn't as well written as Eric Ambler, Graham Greene, Lawrence Durrell or even Martin Cruz Smith. But it is about the financial markets and the fortuitous rediscovery of an ancient method of market timing, previously only known to "them"."
[
more from Tom].
More about Paradigm, a financial thriller by Robert Taylor, at
taylortrends.com I know zipola about Taylor or his methods, but I am always intrigued with what people are doing on the lunar front.
[ed: 23 Sep 06 edit of post originally published 09 Sep 06]Labels: chart-analysis, cycles
Sunday, September 17, 2006
EquiVolume, Box, X-Swing, EVRAA
This is from earlier in the week, showing a decent coming-out-of-lunch scalp opportunity using various methods combined on a single chart. It was such a sweet confluence, I thought it would be useful for illustrating various techniques.
Click to enlarge
(1)
EquivolumeThe equivolume indications were the primary motivation for posting this chart. As I mentioned in
an earlier post, Equivolume seeks to visually display the price-volume relationship for any specific bar. The skinny "Olive Oyl" bars on the downside drift during the lunch hour indicate little participation, a clear alert to watch for a reversal.
(2)
Alan BoxI use the 10m chart for "big picture", so at this point I would switch to a 1m or 300V type display. Nevertheless, the Alan Box shows an "up angular" that has not previously been violated, ie, touched by price, just under the drifting Olive Oyl bars, which is an indication of support. I've added a Fisher-ized fast RSI with slow average to the mix, which is also indicating upside bias (the red/white average) with the fast indicating the pullback. More on the RSI I use later.
(3)
X-SwingOne of the benefits of using X-Swing is what I call "bias". Not a mental bias, but rather, a technical indication of price pressure. In this case, price is traveling about half-way between the 180ma top Bollinger (dark black line at top) and it's mid-point (ie, 180ma), the white dots near the bottom, and both are still "up". Likewise, both the 40ma and 120ma are up and price above those. Finally, the faint "gold" 10/13ma pair slope is also up.
Not nearly as much thought as words are involved in this assessment as X-Swing is a visual method. One glance indicates "up", again, preparing the trader for a reversal signal. The first green bar after the downside drift confirmed the trade, which, again, was better seen on a 300V chart.
(4)
EVRAAIn this case, there were two "post" white EVRAA bars on earlier up bars, which are telling me there may be a bit too much enthusiasm at those points (witness the small pullbacks). But in the context of the price action up to that point, the down "gray" EVRAA bars are fairly small in comparison, so another push up is likely.
Taking the trade, even for an overly analytical trader, was straightforward. :)
More on Equivolume Fine tuning of what we see on the charts is needed, especially during transitions such as the lunch hour. The second post bar 11:50am was, in EVRAA language, a clear indication of a pullback, which was immediately confirmed by the down-bar that came in just after it. See too the same pattern on the first post bar at 9:40am. From an equivolume perspective, that skinny-ish bar was also an indication that there was, relatively speaking, little participation. Given that it was the lunch hour, this isn't a surprise, and a slow but steady drift down followed.
Another thing I am watching with growing interest is what I am for now calling "seed volume", on this chart, the green signal bar that came in after the Olive Oyl bar downside drift. Being that opening volume is typically strong, subsequent equivolume bars will, in comparison, be narrower. The "seed volume" bar will not be as chubby as those earlier bars, but in comparison to the preceding bars, it is wider, and acts as a "seed" for growing volume participation, especially when, as in this case, confirmed by other indications.
Here is the 300V chart. Click to enlarge.
Labels: chart-analysis, ensign, trading-method, volume
Friday, July 08, 2005
The Market Reacts to London Terrorism
Once again,
vicious acts have ended the lives of precious people, bringing grief to countless families, and all who mourn the loss of any life. This subject is too vast for a few words here, so perhaps a
meander will happen at a later time.
The market reaction was reflected in the pre-open Globex hours, and as shown in the ES continuation chart below, was less than a point from a tag of the 62% retrace of the move off the April lows. The cash index, on the other hand, dipped only below the 38% before rebounding. This divergence (of a sort) has me watching price at 1208 on ES (1204 SPX). A move above, with a test from above would be bullish (at least for the next test of the recent high), and a move above and back down with a test from below bearish for a test of the April lows. This may take a couple of days. Good trading to all.
Labels: chart-analysis, market-buzz-gurus
Wednesday, June 15, 2005
my friend's stocks
Every once in a while, someone will ask me to review their stocks, quite often when they are already underwater and facing indecision as to whether to fold or hold.
Here are my takes on a few stocks, along with some comments on cutting losses (
link):
EVOL - I would cut my losses and sell it. See below on "cutting losses"
QLTI - Still in a sell zone. I would not buy this.
LWAY - This is the only one with *small* potential.
DWA - Still in a sell zone. I would not buy this.
Labels: chart-analysis
Wednesday, April 06, 2005
A pretty lil Fib step rally
I've been tracking the action of this rally in daily posts over at dacharts. To keep myself honest (and keep this journal alive), I thought I'd better say something about it. A picture is worth a whole bunch of words. I don't think they come so close to form as this move. I also just love the way the bisect harmonics have played along.
Trading it, however, has been more than a challenge as the intraday price action has been fast and chaotic, the later being reflected in the numerous intraday expandos that have formed.
Expandos are perhaps like hot chili's, you either love them or wonder just why in the world people actually like them. Expandos, a.k.a. "Broadening Formation", is, like all patterns, a reflection of the underlying trading sentiment, in this case, drenched in the emotion of buyers and sellers fighting for fair price. The buyers have won every round, this time.
click to open in separate pane
Labels: bisects-forks-medianlines, chart-analysis, expando, fibonacci
Friday, April 01, 2005
Trying to put us to sleep
What's there to say? It's trying to put us to sleep. A fitfull sleep too as there is almost an expando type of look developing. Sellers took the upper hand, but didn't make much of a dent for all their efforts. No fresh signals on the daily. Too sleepy to look further. :)
Updated ES, 01 Apr 05Labels: chart-analysis
Thursday, March 31, 2005
Wednesday, Daily Update chart
What a remarkable finish to the day, with the added touch of finishing just above the prior swing low. The intraday expando was a particular treat. These can be very confusing to trade as they reflect intense emotions with the wild swings. Because of that, traders sometimes interpret them as reversal signals, but more often than not they are continuation signals, as was todays. Plenty of volume too. The bulls have the advantage just now.
Daily ES updated chartLabels: chart-analysis
Tuesday, March 29, 2005
Updating the Daily ES
Still in the "Reaction zone". Tagged a loose Globex low from 3/22 (1168.75) and managed to close above it. That little candle is today's Globex action. Another interesting day in store tomorrow!
29MarESdaily.png ES Daily, updated 29 Mar 2005Labels: chart-analysis
Sunday, March 27, 2005
Big Picture up Close
This chart is a close up of ES, with what might look to some like excruciating detail. The idea here isn't to be elegant, but to chat about a couple of methods and suggest possibilities.
click to open a larger image in a new window
20d BOLLINGER BAND EXTREMESThere are a number of methods that use 20d extrema. The signals shown here applies Bollinger Bands to each of the 20d Low sma (simple moving average), High sma, and 20d sma and places a dot where price crosses over the 2 standard deviation band (upper band for 20d H, lower band for 20d L, and upper or lower for the 20d).
There are two overlapping 20d L and 20d "buy" signals at this low. Those familar with BBands know price extremes can ride the outer band and be a sign of the strength of the trend. Thus, corroboration should be used, eg, an oscillator, shorter term moving average, or other indications.
The two oscillators are OS, so their reversal would add confirmation, as would a reversal of the 9wma shown on the chart.
TRENDLINESI consider Andrews median lines "fancy", but powerful, trendlines. Price fell out of the longer term Blue fork and, as I show it, is now in the range of that forks "harmonics", ie, mirrored extensions of the bisect, in this case at 150% and 161.8%. Price could well go to 200%, but that's getting ahead of things.
Price tested and is rejecting the Black bisect, right at the Blue harmonics, which creates a pivot for the Green fork. The Green and Black forks are right on prior Low Closes (1166.25 and 1174.31).
Finally, simple TLs are both points of support and resistance.
BREADTHThe McClellan is not strong, but shows signs of a reversing its prior slide. Volume during the decline has been moderate. A capitulation isn't necessary, imo, for a short term low.
POSSIBILITIESLongs are favored with downside risk to 1164 (prior low) and 1155, the 200% Blue fork harmonic. The possibility of congestion may be about equal. Because price has tipped positively, what happens between 1185 (prior low) and 1190 (TL/Bisects) will be important.
Finally, comment on the candles. The Reaction Zone is also in the shadow of Tuesday's (3/22) long candle. That 3/24 closed above 3/23's open is bullish. As seen in
this 15m chart, volume is positive (the yellow lines), and with a positive close on Monday, the daily pivots (blue lines) will have reversed.
Labels: chart-analysis
Countdown Clocks for Traders
Small Clock, simple optionsHere is a link to a small countdown clock made some time ago for the Woodies CCI room (before it became
Woodies CCI, Inc.), by Bennie_T. He distributed it free of charge. Multiple instances are allowed, and the time increments are 1m, 2m, 3m, 5m, 10m, 15m, 30m. It looks like this:
To download this tiny program, Right Click and Save-As in a folder on your PC:
http://amgallo.com/trading/images/3_5minCountdown(b_dt).exeLarger Clock, more optionsThere is also a version with more options, ie, more timeframe selections, but it does have a bigger footprint. This one is also from the Woodies CCI group, and is also distributed free of charge. It looks like this:
Here is a link to the dacharts.com page where it is listed.
http://www.dacharts.com/qtips/min-bar-alarm.htm Both versions allow multiple instances. That is, you can open up several of them and place them next to the chart you are watching.
Labels: chart-analysis, Journaling
Saturday, January 22, 2005
Keltner Channel and Average True Range
I got an email from a friend who wrote
"I'm trying to learn about Keltner Channels - there are a few sites on the net but what I'm searching for is parameters I can use at Stock Charts that would 'substitute' or act as a Keltner Channel indicator."
Keltner bands use True Range (H minus L of each bar) and Average True Range (H-L average of # of bars) to calculate the bands. Like Bollinger Bands, a typical cycle length is 20 bars.
Also like BBands, volatility is what is being tested. Keltners use the TR and ATR as a measure of volatility whereas BBands calculate the statistical deviation of # bars from the average. Both methods use touches of the band to signal "something is afoot".
The thing to remember about ATR is that its direction doesn't directly match price direction. A rising ATR just means the bar H/L is widening (bigger volatility). A flat ATR means the HL hasn't much changed. So a flat ATR is followed by a rise, and following a large ATR move is a period of decreasing ATR. It is the CHANGE in this rate that is of interest and what Keltner strategies exploit.
One way using to simulate Keltners is to a 20-bar ATR as an indicator. Because Kelter bands use the change in ATR to draw the bands, you can use Trendlines on the ATR to indicate changes. I like to draw TLs across peaks/troughs as well as rising bottoms and falling tops. Where a horizontal line stops the movement and reverses, you drop a line down to the price. Where the ATR breaks a TL, you drop a line. Sounds like fishing.
I marked up a weekly COST chart to show what I mean. I added a BBand on the price and a couple of indicators, not that you need them, but one of them might provide another measure of confirmation.
I've marked the inflections (ATR breaks, reversals) with red dashed lines. You can see some are BBand touches or even MA touches, both useful to enter or exit positions. In addition to the clues from the BBand, you can also use CCI crosses of +/- 133 (or +/- 100 or even +/-200 when *really* OS/OB), Sto5 cross 20/80, or the MACD 3/10 cross, as further confirmation and/or entry/exit aides. Notice that the CCI on this chart is using 14, so the signals will look "early" relative to the ATR20. You can adjust one or the other or both and study a combo that works for you.
Not all of the ATR signals pan out as reversals, but even the ones that seem wishy-washy signals ended up as continuation signals. Like all methods, the more you use it, the more you'll see its particular nuances. I will be following this post with a comparable chart using Keltner Bands created with Ensign Software.
Labels: chart-analysis, indicators
21 January Bisects
Today was in some ways a close repeat of yesterday in terms of "The Play Book". The bisects placed for today bear this out: the major black one uses the gap open and first H and L, just like yesterday. The remnants of yesterday's forks (Green, Salmon, and Red) then provided points of reference.
For a different view of the price action, I've faded out the bars and overlaid a line chart of the 10m close. What is interesting in this view is, like before, the role of the Initial Balance H & L and the fib extensions as S&R. Also shown in this chart are the final Point of Control (thick blue lines) and Upper and Lower Value Areas (dashed blue), which are remarkably coincident with the fib extension S&R points.
Labels: bisects-forks-medianlines, chart-analysis
Thursday, January 20, 2005
Intraday Bisects and Support & Resistance
I think today's price action provided a number of good opportunities for selecting non-standard bisect pivots. As a reminder, I call Andrews median lines bisects (
click if you don't know why). Traditionally, one looks for "market structure highs" (or lows) for pivot sets, which makes good sense, in partic. for longer time frames (daily and up). Intraday, however, is more influenced by momentum and, during chop, by local support and resistance (S&R). Today's chart shows some ideas for exploiting common intraday S&R points.
Black Bisect: The first bisect uses gap down open price as Pivot 1. Pivots 2 and 3 are the first Low and High after the open. When it makes sense, I prefer High Pivot bars that close high, and Low Pivots that close low. The first thing to check with a bisect is whether price is above or below, ie, the 50% balance. More on this bisect in a bit
Red Bisect: This is similar to the black, taking the first 60 minute Range
(*) High and Lows as pivots. Again, the candles close high or low. The second rebuff by the 60m H suggests a decent short opportunity with a stop 1-2 ticks above the 60m L. Various target opps, using lower time frames, are presented: the red bisect itself, 50% parallels of the black bisect, and 60m range fibonacci extensions.
White Bisect: The volume spike as price hit the confluence of the 1.62 extension with the red bisect proved a rebound point and allowed me to draw the third bisect. This is too big a bisect for the range, so....
Lime Bisect: a mini-bisect became obvious on the 3m chart, which I then place on this chart. Mini's can be used as potential trajectories and are useful for price objectives only in a lower time frame. Price moved quickly into the white bisect and a reversal was indicated by the spike volume bar, also confluent with a white bisect 25% parallel.
Salmon Bisect: The volume spikes, accompanied by CCI reversals (the black/white iMojo indicator), are like bookends and provide natural momentum pivots. The origin, however, is slightly unusual in that it takes the prior bisect point as its pivot. It initially projected a move lower, but price first moved to test the now-old green bisect. It then reversed a few ticks above the open, and closed towards the 1.27 range extension, confluent with the white bisect lower parallel. There is likely pressure on the open as price is still below both the white and salmon bisects. However, best to review the higher time frame where the odds are clearer.
(*) While 30m and 45m are other intervals used, I've settled on 60m due to the increasingly popular CBOT Market Profile program, which calls the first 60 minutes of trading "initial balance". So, a good start is to standardize to something likely in use by more people. In time, no doubt it will shift as traders try to get a jump on each other (that's maybe a joke).
Labels: bisects-forks-medianlines, chart-analysis
Wednesday, January 19, 2005
Is Volume suggesting a shallow correction?
I asked myself that as I updated the 30m Vold chart. The longer green lines showing the SPX is slightly lower on the close than it was on Jan 4, but still has a net higher Vold. The orange lines are negatively divergent, showing more volume in the decline today relative to Vold on the 13th when the SPX was lower (but in a congestion zone). What to do, what to do.
The weekly ES is on a weak sell signal, with 1163 an interesting support point. A reversal between here and 1163 would likely qualify as sufficient enough a pullback for another run up. Short of a catastrophe, this looks the likely scenario to me.
Labels: bisects-forks-medianlines, chart-analysis, volume
Friday, January 14, 2005
micro-chop and the play book
Doing the micro-chop shuffle. The 5m doesn't show it, but it's glaringly obvious and out in the open on a volume chart (both shown below). The 11:40 bar on the 5m is a fully predictable corrective move on the 3000V chart. I gotta remind myself that the playbook is thin and "they" will run the same plays over and over and over again, no matter how obvious it looks. And it's done at the micro-chop level.
Labels: chart-analysis
Updating the ES daily
After a long trip hugging that bright green fork (was "white" in earlier charts), price didn't quite make it to the upper black median line and has since made a solid correction, breaking a minor trendline along the way. As long as that + divergence holds, there is a shot to (1) tag the little yellow trendline underside (2) creep along the main black bisect and (3) move back over the green bisect. There is a negative divergence on the monthly which bears watching, but the weekly isn't particulary weak. This chart is the ES (e-mini) without Globex.
Labels: chart-analysis
Thursday, January 13, 2005
Ping Pong-Chopping through a retrace
Today's action is one for the daytrading diary regarding pivots. The move was a retrace of yesterday's low-hi move, conducted in two campaigns: the first move a retrace of final swing into the high, and the second campaign a more dramatic completion of the remainder of the move. The projected retrace was in place yesterday once the high was in place.
The first set of chop meandered in stages, tagging Fibonacci and the OP/YC (open price/yesterdays close) cluster and was complete once the 62% was tagged (the lower red line). No doubt stops were being run and inventory offloaded through the whole process.
The resistance at the OP/YC cluster was, as will be seen in the next chart, a strong clue to the real intent. What interests me most is the expando type move off the 62% in the early move, and then over the OP/YC cluster. That it was a head fake should have been apparent on the touch and rebuff from the white fib line at 1188. A confident trader would have made the final sell here. A less alert trader (me) was by then lulled into a stupor by the earlier chop. Too bad, as the last part of the day was a dramatic end to a "day for the books".
Labels: chart-analysis
Monday, January 10, 2005
135m ES (no Globex)
Chaikin is indicating good money flow and the Mojo oscillators are only mildly weak. The last wave extended to 1.618 (top red line, or see the daily chart on the
HNY page, which is still up) where price peaked and fell to break the wedge. So far, the correction has managed to stay above 1172, a retrace sweetspot. While this 135m doesn't inspires an aggressive long, neither does it say shorting is in order. Patience.
Labels: chart-analysis
Saturday, January 08, 2005
Support, Resistance, and Chop
There are traders out there who turn things inside out, reminding us there is sense in nonsense. For instance, the idea of trending and catching trends. Sounds great, until one remembers that the market trends only 20-30% of the time. Tepid, a trader posting over at avid, mentioned this other day, turning the idea around to say, pay attention to chop, esp. if you plan to stay a trader, adding that floor traders are, in essense, "bracketeers". This is of course, trading support and resistance, of which the past five days are excellent examples. Taking the day off is also an option.
Labels: chart-analysis
Thursday, January 06, 2005
update to the Advance-Decline Study
This updates the image below with the latest Advance-Decline Volume data. So far, the Reversal Divergence is holding. It's tenuous, however, in that price is still in the lower range of the retrace (see the daily).
Labels: chart-analysis, indicators
Reminder: January Charts
:: happy new year! :: and charts at that link for those interested. I'll probably keep updating that page at least through January.
Labels: chart-analysis
Tuesday, January 04, 2005
ES Daily tea leaves
2005 isn't living up to bullish expectations just now, as the ADVol study in the prior post, and recent price action shows.
There are some positive divergence, indicated on the chart below by the blue lines. There is also short term support from the black bisect.
What I don't care for is that marubozu-like candle test of the bisect. A longer tail would have been more bullish. An inside day tomorrow wouldn't surprise me. The wedge has stared at boatloads of traders for quite some time, as does its trendline break.
The question is, what will ensue: the terrifyingly delightful plunge long awaited by famished bears; a shallow pullback and delirious new highs for crazed bulls; or rewarmed left-over 2004 hash (choppy test of recent highs and lows).
Here is a chart of the ES e-mini without Globex
(click for full size):
Labels: chart-analysis
Advance-Decline Volume Study
John Wooden, and no doubt other basketball coaches, say to watch a player's hips, not their heads. This sound like the likely origin of "head fake". Well, volume is to price as hips are to head. They are both connected, but volume will tell you where the player is moving. Price is always "right", but it will move where volume takes it.
But enough of basketball, here is a study using $VOLD (Esignal), which is the difference between Advancing Issues Volume and Declining Issues Volume. Divergence studies are never exact, that is, there are often time lags. Those who use RSI or Stoch are familiar with that. So, with that in mind, shown below are various divergence signals using $VOLD vs. $SPX. There is a potential for a Positive Reversal Divergence, in play just now. But that means price must reverse, and stay so, with a corresponding rise in $VOLD. There are clues in the daily chart that indicate a potential rest point or short term reversal also. Time will tell.
Labels: chart-analysis, indicators
Friday, December 31, 2004
:: happy new year! ::
To all my friends, a very Happy New Year, wishing to you all prosperity and peace. Give the dark side a real scare, Share your wealth: material, psychic, and spiritual.
(I'll attempt to keep it updated at least for a few days into the New Year!)Labels: chart-analysis
Thursday, December 30, 2004
One more example of ADVolume and TICK
click for full size image
Labels: chart-analysis, indicators
TICK is very tricksy!
$VOLD is the Esignal symbol for Advance Issues Volume minus Decline Isses Volume. I believe it to be a much better indication of "bias" than TICK, or the simple A/D line. This chart demonstrates how TICK and VOLD "interact". Obviously they are not correlated, but one can see that a whole lotta TICK (in this case a move from 1000 to -92) didn't put much of a dent into the VOLD, indicating that simple re-distribution is going on, rather than a prelude to a flood. Here is the comparable 1m ES chart for reference only (I do not use a 1m chart in my trading).
Labels: chart-analysis, indicators
Saturday, July 10, 2004
Comments - 10 July 2004
Hello to anyone who stops by! One of the psychological effects of watching only an index during a rangebound period is that it imposes upon one the same numbing ennui that that index is reflecting.
The downside, of course, is that it also lays the ground for the famous "frog boiling" example, ie, you put the frog in cold water and the frog is oblivious to its fate as small incremental heating of the water raises the temperature. Oblivious that is until the water reaches that point at which the frog registers pain and becomes aware that action is needed. But by then it is too late, its life-saving energy has been sapped. But enough of this nonsense. Here is the chart (
click here to view in a companion window).
There were a number of warnings that the desired rally would not materialize before a pullback, as indicated by the Short Sto5 divergence and, more importantly, the VIX relative crossings. The range has been contracting and recent attempts to move completly to the upper black fork line have been failures. The last bullish attempts was the failed hovering at the black fork median line.
What could have been a short pullback has become deeper, bringing classic indicators, even those with non-classic settings, into an overbot zone.
Having touched deep overbot, Friday's net positive close created little reversal hooks. HOWEVER, in my opinion, a bounce will be shortlived, or at least won't be confirmed to be much more than a dead cat, until the various indications overcome resistance. A full pullback target is the lower black fork range,
1094-1096, with a dead cat rebound of
1122.
For those still new to indicator analysis, very few oscillators truly move between 0-100. Rather, they form ranges whose tops and bottoms often indicate future potential resistance and support. That is what the horizontal red dashed lines on the Stochastic and RSI panes indicate. Similarly, as they merely reflect price, trendlines are also useful, particularly if compared to its corresponding price trendline (horizontal or otherwise) for divergences (positive or negative).
So, if the indicator breaks the trendline resistances before price does, this would be a bullish divergence. Similarly, if the indicator is repelled before price shows a reversal, this would be a negative divergence.
Good luck to all in their trades!
Click to open a larger image
Labels: chart-analysis
Thursday, March 11, 2004
The Week that Was
What a week it has been! Loads of technical carnage, signaling at best a robust consolidation and at worst a shift towards an even stronger decline. I'll go with the later as there is evidence of sufficient oversoldness for a bounce, perhaps after the touch of 1096. We'll be watching it.
Do look at the last chart: Price Relative VIX, which I now include on the daily chart. It has proved one of the most interesting observations. Note too that small caps have remained buoyant, a sign of lack of real fear.
Labels: chart-analysis
Thursday, February 19, 2004
81m chart ES emini
Could chop around this zone between the grey and green bisects. The grey bisect showed potential to 1181-1190, but the recent inability to break through the 1160 resistance is troubling. As indicated, such failures to reach the upper fork are often indications of weakness. On the other hand, the longer trend is still up, so the bulls may yet throw another party. A decisive break of the Green bisect targets a bounce at 1140, which if broken targets 1130-1125.
open in larger window
Labels: chart-analysis
Friday, February 06, 2004
Potential Path next few days
Daily says still a reaction within the larger up trend. The bar through the centerline is bullish.
click to open in larger window
Next few days, the SPX
65m structure is slightly stronger than the ES, and has similar overhead resistance to push through. The bullish bisects on both are still in play and both show oscillators willing to stay strong a bit longer. This is a
45m ES.
click to open in larger window
Labels: chart-analysis
Wednesday, February 04, 2004
SPX Weekly-Daily
Daily as of today, uses same longer-term lines off the weekly:
(click to open full size)
I am now using
Ensign Software) as my primary software:
(
click to open full size)
Labels: chart-analysis
Monday, February 02, 2004
same 81m, closer up
81m is 5 bars/day
click to open larger
Labels: chart-analysis
Saturday, January 24, 2004
SPX 60m chart in the spotlight
Complete Charts Update (MANY MANY of them) [ edited: stockcharts.com list no longer active ]
There's quite a bit on this chart, some for targeting, some for learning.
(1) LEARNING: In an idea from Ron Wheeler, 'mini' Regression Channels are used to gauge when (and if) a rebound off a pullback low is buyable. The channel is complete on the first higher low off a pullback. SCC's % is a bit wide for this purpose, so I've sketched in tighter bands using hi/lo's within the band. The orange arrows mark the Buy Signal (first closing bar outside the band).
(2) This move was very geometric, the high being within a hair of an AB=CD off the low. A comparable AB=CD pullback is -1.3%, or 1135.5.
(3) This 1135.5 is also confluent with two Andrews crossing, an just above the 'pullback mini-fork' (the black one) at 1136. That the low price was 1136.85 is a bit troublesome (a tail touch of 1136 would have been more ideal), suggesting perhaps a test of that 1136 before a move back up.
SUMMARY: A break of 1144 (with a corresponding break of the RSI overhead trendline) is a buy, however, with diminishing returns as there is now resistance at the recent highs. A break of 1136 confirms a deeper pullback.
(click for full size image in new window)
Labels: chart-analysis
Wednesday, January 14, 2004
Wednesday: Part 1 ( Reversal rebound) fulfilled. Working on Part 2
The RSI Reversal set-up follows-through, with a rebound @1115 (projected 1112-1117) The next barrier is 1128, which the blue 60m fork easily projects with a target of ~1132.
HOWEVER, should price not break the 1128 and reverse, a Negative Reversal is set up, which would feed Part 2 of my favored scenario: a double top set up with a Negative Divergence on that rebound. This creates a good setup for a tradeable *correction*, ie, something greater than the 1-2% pullbacks of late. This would allow the market to regain strength for another run at more highs, or at worst, further consolidation at relative highs, both of which are constructive in the longer run.
click for large image in new window
Labels: chart-analysis
Monday, January 12, 2004
Monday, building a correction scenario
Friday sets up a potential RSI Reversal, but only after a trip to 1112-1117, where price would have to rebound, ie, my favored scenario, but with a break of the 34ma factored in. Part 2 of that scenario is a double top set up with a Negative Divergence on that rebound. This creates a good setup for a tradeable *correction*, ie, something greater than the 1-2% pullbacks of late. This would allow the market to regain strength for another run at more highs, or at worst, further consolidation at relative highs, both of which are constructive in the longer run.
Labels: chart-analysis
Friday, January 02, 2004
One potential scenario
My favored scenario has been a pullback to the 34ma under a Positive RSI Reversal condition. With today's last 60m bar closing positive on mild pullback, such a condition is possible IF Monday is positive. Having said that, a rebound might then create a double top. Since we're talking potential, how a Negative Divergence on that rebound? That might make a good setup for a tradeable
correction , which is simply a scarier pullback.
click to open full image
Labels: chart-analysis
Tuesday, December 23, 2003
How low can it go? Lower still!
I finally got with the program and redid the SPX price relative to VIX chart using the "new" VIX, VXN. Much hand wringing regarding VXN being so low. This chart puts "low" in perspective.
You can see that SPX/VXN has entered 'new' territory. As long as Price-Rel-VXN holds above the MA, the bull remains in charge. A divergence may signal a reversal.
This SPX/VXN study came about because VXN wasn't on its own consistent enough to follow the VXN is low, time to go; VXN is high, time to buy' thing. I noticed a few things:
(1)The ratio SPX price relative to VXN channels (lower pane)
(2)Significant channel shifts happen when price is trending up or down
(3)SPX/VXN reversals are good swing indicators, regardless of channel position
(4)'Significant' tops & bottoms are accompanied by channel shifts.
(5)The direction of the 34d, 60d MA (Bollinger Band basis) needs to shift as well to make the SPX/VXN reversals significant.
Labels: chart-analysis
Saturday, December 20, 2003
From the vault: Viewing the SPX Monthly close
From the vault: the monthly CLOSE chart (#1c below). It shows plausibility for a move to 1115. HOWEVER, negative divergences (RSI -Reversal and ROC weakening) indicate thin ice. As bullish as the 'breakout' from the weekly wedge may look, and it may indeed tag 1100 before a larger correction, a better (ie, longer term) bullish move will come from some sort of a pullback FIRST, which may not come until just after the start of 2004.
click to open full size in a larger screen
Labels: chart-analysis
Friday, December 19, 2003
The Weekly SPX
I've been schvitzing that time was running out on the weekly fork...it either had to exit the bullish projection or DO something. This week, assuming today ends positive, it finally made a move.
The Yellow bisect is a "Schiff". I added the faint grey bisect as I often see a "relationship" between the 1st & 2nd bottom on such powerful pivot reversals.
click to open full size in new screen
Labels: chart-analysis
Thursday, December 18, 2003
Climbing the wall of worry...
But its the bears who have been schvitzin'!
Climbing the wall of worry, which fuels short covering and discourages selling. Couple that with the jolly seasonal aspects, you get the rally. Today the overnight futures high from the Saddam capture got tagged, very tidy. The rebound has been a peppy one and may have a bit more to go. The 60m chart showing resistance, but the daily and weekly still show room to run to 1106.
So what about the trouble? (1) Big caps getting action (Chart 2a: OEX vs. SPX) (2) Small Cap Growth/Value ratio (Chart 2d) running in its channel (backed off the selling a bit) (4) the daily 'expando' was a continuation!! This week completes Options Expiration/Triple Witching, having burned a few bears in the process, and as commented, fading the momentum going into OE', ie, buying the dip proved to be the 'right' thing to do. Keep an open mind!
The move towards big caps out of small caps is a sign of 'liquidity safety', mildly bearish (esp. for small caps). Seasonal strength lends support, ie, the fear of the strong season may be what's keeping aggressive shorting at bay.
Reit: This may be part of a complex topping, but yet another rebound isn't out of the picture, albeit looking weak at this point. Please review the weekly and monthly charts, both indicate 'time is running out', ie, price has not yet accelerated within the forks and may moving out of them, most likely as a consolidation prior to the next move, be it up or down.
1 Nov: Bullish outcome targets 1050, 1065, and 1106 . 5 Dec: Note that 1068 is the All Time High to recent low 38%; 1089 targets the 78.6%. Keep in mind the 'handy' MACD rule of thumb: above zero bias long, below zero bias short, higher time frames control.
Labels: chart-analysis
Tuesday, December 09, 2003
Nice Call, amg! Now What?
Today's Updated 60m chart.
That's the trouble with successful calls, the odds begin to stack against making another one, esp. since I've been on a roll for a while here. Even so, I'm seeing trouble:
(1) Big caps getting action (Chart 2a: OEX vs. SPX)
(2) Small Cap Growth/Value ratio (Chart 2d) continues to curl up
(3) a small stochastic back-kiss (more like a kink) on the daily.
(4) an "expando" looking shape of the last 6 days on that daily, indicating internal instability. expando: successive higher highs, lower lows.
The move towards big caps out of small caps is a sign of 'liquidity safety', a mildly bearish sign. Seasonal strength lends support, ie, the fear of the strong season may be what's keeping aggressive shorting at bay. Oh, by the way, next week is Options Expiration/Triple Witching, so 'anything can happen', and more often than not it will be 'fade the momentum going into OE', ie, it could well dip enough to excite the bears, only to then reverse yet again into 1060-1090 territory next week. Keep an open mind!
Labels: chart-analysis
Monday, December 08, 2003
Monday: +RSI Reversal is getting fulfilled
Shown below is today's 60min chart, which shows the +RSI Reversal being fulfilled. It targets 1075.4, but there are reasons to suspect 1071 may be all it yields:
(1) CCI entered overbot (not bearish yet, but did it too quickly;
(2) MACD is reversing, but sub-zero (can be a weak bullish signal)
(3) Relatively low participation in the bullish move suggests it may not be sustainable.
FOMC meets tomorrow with minutes released on Thursday, both of which may be a sufficient catalyst for some more selling. This is a speculative scenario, so as always, it's best to watch what price DOES not what one thinks.
click to open in new window
Labels: chart-analysis, indicators, RSI
Thursday, December 04, 2003
New highs and a pullback...looking for early indications of "what next"
The pullback, after having *made new highs* (relative, of course, to recent performance) looks like the beginning of something big...but what? May be part of a complex topping, but there are signs of at least a rebound here (60 minute chart).
Please review the weekly and monthly charts, both of which indicate 'time is running out', ie, price has not yet accelerated within the forks and stands the chance of moving out of them, most likely as a consolidation prior to the next move, be it up or down.
The Growth/Value ratio chart continues in its channel. With the recent downturn in the Small Caps, the ratio is curling up, indicating a move back into the 'liquidity safety' of big caps. This counts as a bearish indicator, but is not a load-up-the-shorts-truck signal. This ratio has been a harbinger of broader market direction. Note that it is a weekly chart.
1 Nov: Bullish outcome targets 1050, 1065, and 1106 (on *monthly*, change from 1138). 5 Dec: Note that 1068 is the All Time High to recent low 38% retracement (see the monthly chart).
Keep in mind the 'handy' rule of thumb: Watch MACD. When above the zero line, bias is long, below zero, bias short. Hopefully this has helped some folks using the daily chart from shorting too early. It gave a buy signal (as shown on the chart), but with considerable intraday volatility.
135m chart ES :::
Daily SPX :::
65m SPX :::
Weekly SPXLabels: chart-analysis
Friday, November 21, 2003
Re-it of Thursday's comments
Nothing particularly new to add: the Positive RSI Reversals on the 65m and Daily charts remain in effect and are, to the extent there are now actual upturns in the indicator, strengthened. The charts below have been updated with today's candles. Click to open in a new window:
Daily :::
65mThis suggests a low-volume rally next week, which is to be sold.
Labels: chart-analysis
Thursday, November 20, 2003
Thursday, 20 Nov
The intraday price action was very turbulent today, and somewhat hidden by the Daily and 65m price charts, shown below updated with today's candles. I anticipated up action, but I didn't anticipate a close past a critical low as it did.
I am less bullish at this point, but speaking purely technically (*), there are STILL potential positive reversal indications. This very vexing rsi positive reversal is still in play, or perhaps better said, not dead. A reversal on the 65m keeps it in play and break of SPX 1018 on daily kills it.
This price congestion in the .382-.707 fib zone is best seen on the
135m ES chart, where prior gaps are indicated. Interesting stuff. There are also good "gap lessons" to be learned by studying
this NDX 2001 gap classic.
(*) I say purely technically because there is a gut sense of further price erosion.
Labels: chart-analysis
Wednesday, November 19, 2003
Tues 19 Nov, Daily, 60m SPX
Positive RSI Reversal on Daily-- may be a dead cat, but "should" go up tomorrow. Note there is also a negative divergence in play (typical during congestions). Price is weakening and on the verge of outright done, but not quite:
Positive RSI Divergence on the 65m, with only a little room to run as there is also a concurrent Negative RSI Reversal being built (price would have to best the last swing high to negate it). While the daily is weakening, this one is already working against resistance:
Labels: chart-analysis
Monday, November 17, 2003
135m & a "trigger line" example
I do like this time frame. From yesterday
The typical move now would be to briefly retest the bisect area(~1051) before heading for the lower median line (~1043), where there is also The Gap. Having already tested the upper boundary twice before, the gap may well act as an air pocket sucking price clean out of the consolidation range.
For tomorrow, a move to 1045.75, which if broken strongly targets the yellow bisect, then the "trigger line" , otherwise mo' down.
In yesterday's 135m post I alluded to the grey fork "trigger line" (shown above) and how price sometimes meanders in the zone created between it and the adjacent median line. Here is another less confusing example of such price action.
Labels: bisects-forks-medianlines, chart-analysis
Friday, November 14, 2003
Friday, 14 Nov -- that loverly 135m
This mornings price had me snorting and huffing as it crossed the 1061 resistance and headed for the 1.27 extension of the prior reversal. Alas, it deflated and left a spike through the upper median line, which was a short signal.
I got hosed day-trading the next bar off a 15m chart and called it an early day. However the afternoon closing bar cut right through that yellow bisect, indicating a continuation of the pullback.
The typical move now would be to briefly retest the bisect area(~1051) before heading for the lower median line (~1043), where there is also The Gap. Having already tested the upper boundary twice before, the gap may well act as an air pocket sucking price clean out of the consolidation range. I've sketched in AB=CD extensions, which also coincide neatly with the gap. This is a HIGHLY geometrical chart. I really ought to see if there is a tradeable time symmetry there.....
It was a friendly chart for the last week, but it may turn on me next week. Fate and the market are fickle that way.
PS-- An interesting "case study" for bisect traders is the so-called "trigger line" (Mikula calls it that in his book), or what Andrews called a "warning line", in this case that faint grey "trendline", which is really an extension of the P1-P2 line. Each bar with a tail outside the line managed to close within that line. A close outside of it would have been a bisect failure. One thing that often happens is that price then trades inside that little area created by the trigger and the upper median line. That is less likely in this case due to the aggressive closing bar.
click chart to enlarge in separate window
Labels: chart-analysis
Thursday, November 13, 2003
Thurs, 13 Nov, 135m chart- end of day comment
Here's where the ES closed. I greyed out the former red down bisect and the older blue bisect is now back in play. Price touched the prior-red now gray 'warning' line (or 'trigger' line as Mikula calls it), as well as the upper yellow, both of which are resistance. The Negative Reversal may have played itself out, and there is still a downtrend line on RSI to break to confirm more of the bullish case.
In short, not all out snortin' and huffin' bullish, but no outright sell. Support @ 1053-1055.5, resistance 1060.5-1061.5 and
da moon! hee hee
Labels: chart-analysis
Wednesday, November 12, 2003
Tuesday 12 Nov, 45m chart update
This is a close up of yesterday's chart, showing today's price action. The "clue to the continued price action was the strong bar through the 25% (1/4) median. There was also good support from the gap, trendline, and Fibonacci as mentioned yesterday.
Note that the close up YELLOW fork is yesterday's gray fork. Today I added the "hyper" lime-green fork. In case you don't see it, also note the "retest" mini-double-bottom, which forms the pivots for the hyper fork. After a fitfull start, price climbed steadily, stopping just shy of the upper median line.
Now what? I've drawn in a potential Fibonacci retrace to get an idea of a likely retrace, but may have to up the ending point tomorrow. I speculate an challenge of the prior hi at 1061.5, which could come in the form of a small triangle. 1061 is also the upper median. This move was pretty feverish, so a consolidation to 1053 or at worst 1049, wouldn't be a surprise. Anything greater spells a reversal.
Pullback catalysts could be bad news-- or negative reaction to just so-so news. On tap for economic news for this week: Jobless claims Thurs; Greenspan, Retail sales, Industrial Production, and Consumer Sentiment Friday.
Labels: chart-analysis
Tuesday, November 11, 2003
11 Nov, 45 min chart, loaded
This chart has all sorts of bells and whistles. Main features:
- Two trendlines broken
- Third TL tested today
- RSI negative Divergence (lower low on RSI w/higher price on uptrend)
- RSI Positive Reversal (lower low on RSI w/higher price on downtrend)
- Gap "support" (pink lines)
This is weak to me, but not catacylsmically so. For tomorrow, it looks like at least a move to the dashed gray line (the "congestion fork").
A break of the upper yellow median line would target 1052ish.
A strong break of the lower grey median line would push price into that gap zone, where there will be support at 1035ish.
(click image to enlarge in a new window)
Labels: chart-analysis
Monday, November 10, 2003
Comments for Monday, 10 November
Support at 1042.5. The bullish outcome is weakened, but not dead...yet. However, a strong move below 1042.5 does crimp the likelihood of moving back to the 1060 area and opens 1028-1032 and 1011-1015.
Look at the small cap ratio charts. The Growth/Value ratio chart is barely turning up. This ratio has been a harbinger of broader market direction. It is presently forecasting a minor pullback.
1 Nov: Bullish outcome targets 1050, 1065, and 1106 (on *monthly*, change from 1138).
Labels: chart-analysis
Wednesday, November 05, 2003
Harmonically, a hum dinger of a day
For traders using geometry (bisects, Fibonacci, patterns), there are some days that come together just right. Today was one of them. This piece focuses only on the moves after the opening flush.
Click here to open the chart in another window (easier to follow the comments)
The chart below is a 1000-Tick chart. I actually trade off a 400T or 550T chart using a 150T or 266T chart as a finer vernier. However, I couldn't make the 550T chart "small" enough and used the "Lock Studies" feature in Ensign to leave my studies from the 550T chart on the 1000T chart. Pretty nifty.
The colorful band at the between the price & indicator pane are equal-hour bands. Tick volume is not constant in time and this band gives some insight into trade volume. Short bars mean very little trade volume (more risk) whereas longer bars indicate good liquidity.
Bisects: [1] There was an early "yellow" bisect that let me know when the trend changed, confluent with a tradeable RSI divergence.
The blue bisect was drawn in at the 13:55 reversal. Remarkably, this bisect would prove useful for the remainder of the session.
Fibonacci: [2] The reversal at the low allowed me to sketch in possible Fibonacci retracements from the fall off the morning high, which I use to aid me judge the strength or weakness of price moves.
[3] The first move off the low to the .382, where it reversed, allowed me to sketch in a smaller Fibonacci retrace of *that* move, which along with rising RSI/MACD indicated a low risk long entry.
Patterns: The Low, and next two reversals, allowed sketching in the first AB=CD [4], which reversed just shy of its 1.0 target (1048.75), which itself was a confluence with the 50% large Fib, and the 25% inner parallel of the blue fork. Not exact (the angle of ascent was also a tad too sharp), but coupled with a negative RSI, a good pullback signal.
Not shown (there are already too many lines) is another mini-Fib of the short leg, which showed a 50% pullback, confluent with the .786 level of the prior leg.
I don't pyramid my intraday trading, but this reversal was a low risk long for another trade, and the place to add the second AB=CD pattern [5], which was confluent with a spike touch of the lower ML.
This was the most exciting move of the day, moving very rapidly, and consolidating just above the AB=CD target, within a quarter point of the big 61.8% Fib. While still strong, intraday for me is more about getting the meat of a move and not drinking the last drop out of the bottle. That was my last trade today.
However, for real party goers, the Positive RSI Reversal (aka "hidden" divergence) [6], along with a
WILD EPREM move signaled the end of day fireworks, engendered by the anticipation of the CSCO earnings report after the 4pm bell.
All in all, one of the few days where so much comes together. A day to savor but to not "expect" again as in my experience, it doesn't happen this way that often!
By the way, the lines were (1) cleaned up a bit (eg, took out the extraneous Fib targets that weren't touched) (2) not as confusing when trading in real time as the chart is larger and the old stuff "falls off".
Labels: chart-analysis, indicators
Tuesday, October 21, 2003
21 Oct, after hours
Ah ha! Found a Negative Reversal ('hidden divergence') on 60m (below). 1st target 1043, where there is a multi-fork tangle, or 'confluence'. A push down through it targets even lower. Likewise, a bounce off the tangle signals more congestion.
Labels: chart-analysis
21 Oct - Congestion ahead?
When support & resistance are in close proximity, that's called congestion, which is shown below on the 60m by the red fork colliding with the green.
Labels: chart-analysis
Sunday, October 19, 2003
7 Oct to 19 Oct
19 Oct: I didn't trade end of last week-- but the 60m was a good guide for those who did. The focus now shifts to 'old support becomes resistance' -- in indicators as well as forks. 60m chart below.
Another 'handy' rule of thumb is to watch MACD. When above the zero line, bias is long, below zero, bias short. This works across all time frames, with the higher time frame, of course, trumping when considering longer term position trades.
Note that the daily MACD is looking to turn down, but is strongly above zero. To me, this says this particular pullback may be shallow, particularly as the weekly MACD is rather strongly above zero.
Looking closer at the weekly MACD, it is a bit long in the tooth and there is triangulating in the STO. These advise caution as a turn down could be sudden.
14 Oct: Little change in 60m path. Added numerous commentaries. Caution, IMO, is advised, but not enough for outright broad market shorting. Pick & choose carefully.
7 Oct: The Energizer Bunny rally! "
click on chart to open a "full size" version
Labels: chart-analysis
Friday, October 03, 2003
that bullish move
Note: the 135m chart below will continue to be "self-updating" -- meaning I overwrite it at the end of the day.
This is classic stuff: meets Rules (1) & (2) outlined earlier:
(1) Reached the latest ML
(2) Gapped through it
Rule (3) says price will now pull back to the ML....and we again look for either a gap-through it (making it a failed bullish move) or a reversal, which would target the uppper fork.
Note that Rule (4) was temporarily negated (on this part of the move) by the move through the ML. Rule 5 says I now need to draw in extensions from prior MLs to see where potential resistance lies.
See this chart Were one swing trading, one would have positioned last night w/a long and kept a Short ready; or vice-versa, which would have been riskier & very much counter the immediate smaller trend, which was still up.
Will keep monitoring "the situation".
Labels: chart-analysis
Wednesday, October 01, 2003
1 Oct : Reaction Rally topping?
I've chosen the 135m ES-mini chart using Ensign software to review today. That this was a reaction rally is evident in the decreasing volume, whose weakness is also indicated by the down-trending Acc/Distribution line overlaid on the Volume.
The red down bisect finished during yesterday's late day run up and was pretty close to ideal. The yellow bisect I've drawn isn't at all "ideal", ie, price doesn't track the centerline. HOWEVER, it has a different use: it show bigger picture price velocity relative to two important pivots.
A gap-up or strong move tomorrow would give cause for continued bullish moves. Likewise, a weak move would signal there is no price velocity to overcome resistance and I would at that point promote the "ghost grey" potentially bearish fork. Note too the Fib 61.8 @ 1019 crossing the bisect.
Note: the bias says FLAT because the general trend is DOWN and the indicator buy signals are to be interpreted as counter-trend buy.
Labels: chart-analysis
Sunday, September 28, 2003
catching up...September notes
notes from the SCC page:
9/28, Sunday: Looking narrowly, there are indications of a rebound in both the daily & weekly charts: (1) Friday gapped down on somewhat lower volume than the past two days, also down; (2) the weekly chart is clearly kaput, but often price will revisit the lower trendline of a broken wedge. These two indications feed the idea of a rebound, but don't make me bullish, as evidence for overall weakness predominates. In other words, a bearish bias is warranted.
Here are the September charts:
Daily ..::..
Weekly ..::..
Monthly 9/25: Thursday after OE is often a fade of momentum going into it. However, some nasty damage on the daily RSI, albeit with support on the old range channel fork. The VIX study (end of page) shows a top, confirmed with a wedge break on the weekly chart. Even with a higher weekly close-- which would keep the bull breathing a bit longer-- RSI has been weakened. I'm flat and cautious here.
9/19: Triple Witching, OE, just another day at the casino. Does anyone else see a wedge (bearish) on the weekly? Note: If price does not reach the upper 'navy blue' fork on daily (over the next few days), that is a likely failure and 1050 will be saved for another bullish campaign.
9/18: Broke congestion w/a MACD kiss and move into 1930+ range. 1050 is on both daily/weekly charts. SPX/VIX (last chart) entering 'overbot' area.
9/18: I asked earlier, Will September be the long awaited correction? It looks very bullish right now, but there are 'overbot' indications. However, cautious traders are not the same as bearish. The month is not yet finished, so the bullish monthly chart is still only potential.
9/12: There is 'congestion' support in the trap area, which if fails, targets the 1000-1004 area. If that breaks, 984 is back in view.
Notes: the anticipated Acc/Dist on the Small Caps crossed, but may now consolidate with a downward bias; the RSI Neg Diverg on the SPX daily unfolded and may find support on the longer term RSI fork (this support also broke); price was turned back at the 'big picture' 1021 61.8% fib, but held a key support at 1009. The 'fork trap' looked to contain further downside-- and it did. See 9/18 comments.
On the bullish side is a 'hyper fork' potential, considerable volume and at best a stabilizing fundamental picture. On the bearish side is that this market hasn't taken a breather, the small caps are exhausted, and the safety of big caps is just that: safety and not particularly growth.
Labels: chart-analysis
Thursday, September 04, 2003
addendum
OK, so the market managed to tack on a few points. 40 of them. Net. Not bad, if one had the stomach to ride that gyrations. The fact is, the market was at 1015, with a target of 1023, on June 18, as I just noticed by looking further down the page. So it gave up 40 to tack em back on again.
Just staying with the reality, putting the feeling of churning into proper perspective.
Labels: chart-analysis
Sunday, February 10, 2002
Wither Next?
The SPX/NYSE continues to outperform the NDX/COMPQ. This is best seen on the Andrews pitchfork studies. Notice that while all the indices bounced, the COMPQ is working within a steep down-fork while the SPX has bounced off the larger Median Line. At worst a consolidation or perhaps even a modest rise this week, which is also Options Expiration and likely to be volatile. I [still] do not believe ollie-ollie-all-in-free has been called!
Labels: chart-analysis
