Day trading the DOW 28/04/03

[ChartMan]

Whatever it was, someone was in the know! Great follow on today. No point in doing the boring stuf..... The open was a huge dive, and some great target tracking to maximise profits, all targets being met until the final bottom. I warned in the chat room that opening PD's are really too unreliable to trust, taking a long time to deliver AND with unpredictability... Today took an hour to resolve with no clear cut peaks. In fact , the divergence didn't show at all in RSI, which is usually the indicator that I use. This time, it showed only on CCI.....The bottom clue had to be the failure of the 4th leg down and short term significant divergence from 15:20 to 15:30 in RSI. Final short cover should have been at 8360 as the "W" broke the middle leg. I suppose that after such a drop, one could safely flip the short.... instead of waiting for a 100 MA break. RSI at 11? how low could it go?
Follow the long into the 100mA and the first sign of a real target was the pullback just before 19:00. Note the RS switch in the uptrend resistance line was broken just prior to this, so we'd expect a pullback.That target got met, and then we were into a 3 pk ND top straight away. You got 1 extra chance to get out on the 4th peak at 8470! If you played it by the book and flipped the long on the third peak, you'd have made a few extra worthwhile points. A hint of 3 pk PD for the close but too fine to be worth a call. Exit at around 8450 by the time you decide it's not going lower..... Good for 200 points today.

 

[ChartMan]

After all that, we're still firmly in an up trending channel. Clearly , for now, the selloffs are being met with equal enthusiasm from the Bulls. That bear triangle failed to deliver the target of 8320....
That move gives the DOW a 5% rise over the last month. I heard the FTSE made 8%....

 

[spoon102]

Don't know how much can be read into today's market action. As we know the Globex system had a shutdown. This may have resulted in a halt the decline today.

 

[bansir]

Still couldn't bring myself to take advantage of those early pullbacks.

Just out of interest, I had the bottom 'W' logged as an inverse head and shoulders which made target at 8375. Seemed to work, but was my interpretation flawed?

Best Regards,
Neil

 

[ChartMan]

No, not flawed. Everyone's interpretation of TA is different. Some see things that other's just can't. Yes, you could see that as an Inv H&S. The flaw is the target, if anything. I make it 8360 tops, but then I use my own rules for targets, as oppsed to the text book rules... Anything less than a 20 point target is really not worth considering on H&S's. In this case it's 10 points.
At the time, the "W" bottom looked promising. As it turned out, there was a long wait for any further action. You don't know that at the time though.

 

[ChartMan]

Nice easy day today, again. :cheesy:
Mini divergent bottom at the open for a gamble long and away. First target met T1.
Sitting and holding above the 100MA was probably the lesser of two evils- not enough room to go short except for the scalpers- not that you would have known that at the time. Take your cue from the value of CCI,... >100
Next up the triangle. This initially failed to make T2, and dropped quite a bit. Again, here was a short opportunity, as CCI and RSI were both topped out AND the price failed to meet target. Correct choice. By 16:30 and 8550, you should have covered for a small loss....
Flipping here would have been an impulse trade. If I had made the error, I would have sat back and looked for the next "safe" entry.....
Not long to wait as the triangle broke to the downside with T3 target that failed. So here was a possible long entry to get back on route. That would have only got you 20 odd points unless you got out on the short 3pk ND top ( only 20 mins).
DOW 130 odd points up on the day, and around 150 with a good entry was about as much as one could expect.