Dow Intraday Charts 01 Nov - 04 Nov

[tradesmart]

Probably too early to be channel guessing, but some of the recent guesses have worked well, confirming S/R and giving entries to some good multi-day trades to supplement the day trading points……

No sign of divergence on RSI or CCI yet so maybe the index will drift higher until the election result or some associated catalyst forces a breakout either way……

And of course oil now sub $50/b must aid the bulls……

Down at the trading shed, the shedcam is showing that two bizarre creatures have arrived on the scene and are desperately seeking our attention…...

This is obviously a timely omen, and a reminder that getting on the right side of market moves this week is essential to maintain and enhance the proverbial ‘shedload’……

ps - According to the Stock Trader's Almanac, November is the best month for stocks when incumbent presidents are ousted and second worst when they win.......

 

[TraderTony]

Not sure if this will work but I've just received this email for free subscription to SFO Magazine (online only for those of us outside the US). It encouraged me to forward it to friends so here you go. I am not familiar with the publication so proceed at your own risk etc...

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[justyn]

Nobody commenting on the action tonight? Here is my take on today ...

"A" attached. Moved up at the open but failed to break 64, but then failed to break below the opening price on the pull back. Then broke above 64 which was the clue to go long.

Double top and divergence at "B" signalled the time to get out and take a gamble short entry if you don't mind the risk.

Looked like a bull flag forming (more clear on 3 or 5 min chart) but only 2 bounces of sup/res not the 3 you would expect before it broke upwards.

With the repeated failed attempts to break above 32 the best bet was to wait for the consolidation to finish and see if we were going to break up through 32 or down through 10100.

The break down through 10100 came with vengence and the triangle at "D" had a target of 10020/10010 which was met with the 3 pk divergence on RSI.

Another gamble entry here was worth another 20 points or so.

Looking at the longer term picture chart 2 attached shows the daily chart and the bounce down off the triangle resistance line. I guess the election result will determine whether the triangle breaks up with a nice rally or not.

Hope everyone did well today!

Justyn.

 

[Quercus]

Sall
These are just my thoughts, and they come from someone who's futures trading account has never been in profit from January this year! (I do trade shares and CFD's also, so don't feel too sorry for me. )
Until recently I have only ever traded a single contract on two instruments - ES and YM. In the early months it was easy for me to hold trades when in profit, and also to set fairly wide stops, and allow price to approach these stops. As time progressed, and my initial relationship with the markets began to mature, I realised that capital preservation is the most important aspect in the early stages.
As a result I began to tighten my stops, and think harder about entry with regard to the risk involved. In other words if I couldn't get an entry with a well placed stop within my tolerance then I wouldn't take the position. I still could not let my profits run, and hence began a running battle of small wins and losses with the broker getting the real benefit!
After about three months I stopped trading money and returned to simulator trading for over two months. I then returned to trading the instrument using CFD's in order to reduce the stake size, but the SB price bias really began to annoy me, having traded the single point spread of the future. I went back to trading the future, and was back to square one, dying the death of a thousand cuts, with small wins, small losses, and brokerage!
I clearly have a psychological problem with this business, and am determined to overcome it. Having done substantial research, and internal analysis I am convinced that I need to trade multiple contracts, in order to take profit when it is presented, and to then protect the position with a trailing stop. At the moment I am trading two contracts on YM, and try to take profit on one contract at 10pts (or 6 or 8, depending on the price action), and then moving a stop to b/e when 15pts profit is made available. The final contract is then managed from a "risk free" position, to wherever my psychological tolerance level lies, which you can probably tell is not too far! I would like to reach a position where I can trade three contracts, and take profit at say 10pts on one, 20pts on the other and then let the third run. This will happen given time and discipline.
The rationale behind this is pretty common knowledge, and lies behind the need to feel good about a bit of profit, whilst being able to remain in a good trade. With just the one contract you are either in the game or not!
All of this has to be within your own risk tolerance level of course, because by trading more than one contract the initial risk is significantly higher. I do genuinely believe, however, that trading multiple contracts is inherently less risky in overall terms.
This stuff is very personal of course and we are all made differently, so if it's useful great, if it isn't then just ignore it!
Cheers
Q

 

[sall]

I sold of my long position @ 10122 which I had from 10053 previous day, don't really like doing that but gut feel was so positive that there would be a break upwards. Soon after I played a sell @ 10121 , 1 contract gamble entry , but had to close in measly profit @ 10112 ,due to prophet locking up too many times, I even phoned them was advised that they were dealing with it as fast as possible. Didn't get the charts till 4 hours later. Normally I would be kicking myself of getting rid of the sell, this time I feel the opposite, I didn;t have the tools therefore closed in small profit , was too risky to leave open, there is always other opportunities...

Quercus: Many Thanks for your honest comments I have been through exactly the same kind of scenario, it was like if you were writing about my story. I haven tried the two contract thing myself in this way:

I would make a small stake entry followed by a big one on confirmation from the first one. This has ony worked for me 3 out of 10, by putting into practise my own trading strategy and also CM's dow trading strategy , for e.g. especially when you do a gamble entry , it breaks the 100ema and play a higher stake thinking the move would be down/up...but alas it goes wrong way wiping out small stake profit and the big stake one too and leaving a nice loss to dribble over .. This is why I may have a problem in putting your comments into practise,unless I 'm reading them wrong, sorry , let me know. Please feed back via personal email or here to advise if it has worked consistently and your in profit in the next couple of weeks/months.At the moment Trader Tony's comments seem viable, but I'll have to try and see will let you know how it goes.. Thanks again for your comments and support.

 

[ChartMan]

Iwas out til late last night so I'll try and catch up tonight. BIG move in the futs.. Who was brave? ( or should that be stupid?)

 

[TraderTony]

Tuesday 2nd November 2004

9:39 1) L 10056. Moving up a bit very slowly.
9:45 EXIT: +4 closed on lack of follow through/doji cross candlestick. Market actually held up for another bar but I would have been stopped at the same profit the following bar on my normal approach. Then it immediately continued on up again, so either way, just like yesterday, I got out of a good move far too early. I'll have to add this to the top of my 'things to look at' list.

10:03 2) L 10075. Ugly re-entry having missed a big chunk of up move. Thankfully it still seems to have some upside.
10:15 EXIT +27 on possible reversal bar right at 10100 level.

Still, I could have done much better just to have stayed in the up move from entry 1). Perhaps it's just the cost of tight trailing stops which in other circumstances keep me out of a lot of trouble.

Staggeringly, I still got out too soon as it keeps going up. Get a grip man. Should have got another 14 on the second trade before exiting for 116 at 10:29.

No more trades by 1:30 - looks like election day paralysis has set in. I'll call it an early night there.

EDIT - Boy - looks like I missed some real fun and games later in the day - what was that all about?

+31 from 2
+29 for the day after commissions
+3 for November so far after commissions

Sadly no trading for me Wednesday but good luck to all.

 

[trendie]

D4F showing Dow at around 10,160 pre-market !! ( 100+ up from last night )

gap up ?

my stop-and-reverse has been shot to pieces cos of overnight action !!
back to the drawing board!!

 

[The Beyonder]

EDIT - Boy - looks like I missed some real fun and games later in the day - what was that all about?

Hi Tony, if you're referring to the sharp drop in the afternoon, it was because the Drudge Report, quite an influential website I believe, was showing early election results were favourable for Kerry (apparently a Kerry victory would have been bad for the markets).

Shows you never to believe what you read. :cheesy:

 

[sall]

MY TRIANGLE,......... JAWS PREVALED AFTERALL but I didn't get any of it may do later though....

 

[justyn]

Bull flag with 10,300 target anyone?

Justyn.

 

[ChartMan]

Not sure I'd trust it , given the reason for it's formation. Overbought correction?
Broadly staying within the channel bounds, bar the election fever spikes. Plenty of room for upside so Justyn's target is well within reach.

 

[ChartMan]

No chance to get the rise as all the action was overnight. So then the only option was to go short adn hope it wasn't going to be an up only day.... With the strong positon, the pullbacks went 25 odd points.Obvious out at 100 with the (unusual) divergence on CCI .

 

[frugi]

Bull flag? Not today thank you I'm full of pennants already. Or is that Tennents? I do hope not cause it means I've lost my sense of taste as well as hearing. Anyway...

Watch out for me dumping 4 million YM on you at 10270 and 10400 :cheesy:
That channel top will provide res, and so should the fan line.

SPX 1160-63 is perhaps the key; if that's taken out with conviction we will fly. At least, that's what everyone seems to think. Christmas rally? Mmm, about time. Remember last time we took out 1160 though. it was a nasty intraday bear trap (crash up, rest, crash down) so I want 2 daily closes above to be sure of my horns. No doubt that's exactly the moment when stevet will be offering size to fulfil my ignorant bidding

I'd like to see today's gap filled before we go up too. This might coincide with the Naz/SPX testing their daily channel breakouts, a feat that the Dow has yet to accomplish, laggard that he is.

SPX is only 1.7% away from cracking it's recent high at 1163, while Dow is 6.5% and Naz 7.2% away. Either the SPX drags them up a long way on a BO or nobody makes it, I guess.

Looking OB on the 60/120 mins on all indices and I believe there is a tasty RSI ND too.

Everyone seems bullish (investors sentiment surveys, pundits, even traders on Bloomberg) AND monkey boy is still allowed to wield his stick for another quartet of ugly years, so I'm hoping to short soon, when the last bears have been squeezed and converted to the bullish case. It's all in the price already and expectations run high. Perhaps I sould pitch myself in front of a TGV while I'm doing it. Nevertheless. Dow 10270 looks to be a good starting point to scale in short.

Either way, you can be sure the indices will fluctuate The market will do what she needs to deprive the most people of the most amount of moolah, as ever.

Note how ES obeyed its triangle target with a nice vol climax on R1 while the Dow fell 20 odd points short ,choosing to bounce early off classic century support at 10100.

Over to tradesmart...

 

[Bill]

Hi

I've attached the daily chart and I did trade today but with a fairly neutral result. Still it's a plus innit !

The channel rules were not useful today, [and led me to one mistake] but there was a big triangle which is normal TA. The only thing was I couldn't decide which way it would break so got in rather late.

+6 is Ok for me.

Regards

Bill

+-15 ema Rules are

1. Short if price crosses 100ema and touches/crosses 100ema+15.
2. Long if price crosses 100ema and touches 100ema-15.
3. Short if nd and price is 100ema +15 [or v close]
4. Long if pd and price is 100ema -15 [or v close]
5. Don't trade in the 1st hour
6. Stop losses above/below obvious SR
7. Don't open a trade in the last hour

 

[sall]

Same as Bill only played one short entry as there was a gap to fill around 10100, plus 32 was failing to hold, 20 points..

 

[tradesmart]

Over to tradesmart...

Well that definitely is madness even in such distinguished company….!

Therapy could be available….

Things plainly looking extended now, with divergence on CCI and RSI will soon follow imho. I suspect that they might go for a retest of 10200 today, so will be looking for a possible double top setup and a decent pullback from tomorrow when the NF payrolls figures cause a reality check and everybody has forgotten who’s President again…….(George who…..?)

Regards, Mystic Meg

 

[justyn]

Not sure I'd trust it , given the reason for it's formation. Overbought correction?

Looks like you were right Chartman. That 200 point move up was a spike rather than "real" slower move up.

Looks like a consolidation day today so far, I think I will give today a miss or I'll get whipsawed to death.

Justyn.

Edit: Looks like I was wrong about the consolidation with the chop at the open. Was I right about the bull flag? Price now just above 200.

 

[tradesmart]

We appear to be seeing the ‘magic’ breakout above the all year long top consolidation trendline…..!…….Target 10850……?!

RSI and CCI still pointing to the heavens, so no apparent danger of a serious pullback just yet…….

And how many shopping days to the fabled ‘Santa’ Rally………!?…..... :-0

(or will it be pump'n'dump ahead of tomorrows NF Payrolls numbers.... )

 

[ChartMan]

Nice to see the Dow heading smartly in the direction of my comp. entry. 150 points straight out of the gate. Sweet. Getting a bit tight though for some more upside tomorrow, without a pullback. There's no limit to the height of the flames when you pour petrol on a fire though.... you just have to step back a bit smart-ish and watch the eyebrows. ( that happened to a mate of mine some years ago and he spent 4 weeks in hospital).