Dow Intraday Charts 08 Nov - 12 Nov

[justyn]

Struggled a bit today.

I find I am often having trouble recognising whether a change in direction is a pullback with more to come or a reversal. If you allow the pullback 10 or 20 points then by the time you recognise that it is actually a reversal you can have given back your profits or even turned a profit into a loss.

Can anyone offer any advice?

It always seems to work against you as well - get out too soon and you miss some nice points, wait for the pullback and it turns out to be a reversal and you kiss your nice profit goodbye

Went short on the divergence on the two peaks at the open today and calculated the pullback at "A" gave a target of 370. Was expecting some kind of clue for more down at 70 or some divergences to trigger the exit.

Seemed to be a mixed bag of divergence, no 3 pks over 25 mins so get out in case when the target was met?

Looked like a Head and Shoulders at "B" (back up to the HOD?) but then 3 pk div over more than 25 mins at "C" so I got out and gambled a short figuring this was 60 points down from HOD, 20 pullback then another 60 down.

I was wrong, the price suddenly motored North and it looked like the H&S had been right and we were really headed for HOD again.

Got the triangle break at the HOD and targets on the way down etc.

Keep up the good work everyone!

Justyn.

 

[Quercus]

Justyn,
I'm sure you know what I'm about to say, but perhaps like me you tend to forget or let other factors cloud your judgement!
"Timing is Everything"
That pattern at C for you to take the short occured at around 13:00 EST, in other words - lunchtime! If you are able to chart volume that too would have indicated a similar lack of interest.
Couple this with the fact that the FOMC meet tomorrow, a range of 120+ points the day before is most unlikely.
We have just almost had an NR7 day, with the ranges being - 68,125,125,193,84,46,52. Add the fact that tomorrow is also a Wednesday which has the highest probability of being a trend day then maybe our old friend Sir Greenspam is about to light the blue touch paper!
All aboard the skylark!
If only I had the cojones to hang on for long enough!!!!
Let's see what happens.
Cheers
Q

 

[counter_violent]

chartman

Is it possible to have a one day cup and handle patten ?

Today's chart looks like it may be ! lots of stalling /watching and waiting, or do i have this hoplessly wrong ?

 

[Bill]

CM

I'd like to ask Bill to consider his allocation of 30 points +5 ( for the spread) as a stop

Yes normally I would agree CM. Let me explain. This is yet another experiment [CapSpeads simulation as usual] which calls for overlapping trades (or 2 half size trades if you prefer). The second short/long comes around 20 points above/below the first right at the 20/25 point stop position for the previous trade. It did not make sense to close one trade as a stop then immediately open another. So I had a choice, move the stop from the first trade closer (say 10 points +5) or further away to 30 points (+5).

I'm sure that's as clear as mud. Have a look at yesterdays chart. The short I took at 10402 then the next at 10420. The second trade would open just when the stop from the first has executed. Do you see what I mean. In this case the extra wide stop saved the first trade and allowed me to close it for BE whilst allowing the second to run into reasonable (for the day) profit. The downside is an extra 10 point loss as you say. But this is of course another gamble, sometimes pays off sometimes doesn't.

Suffice to say that if I can see standard TA flag/tri targets or have a winning trade then stops revert to normal levels and this 'plan' is shelved.

On a more general note I have to say I am not entirely happy about fixed length stops [although I do tend to use them at the moment]. I think they should go above/below obvious SR as very often I find a stop being taken at a points where TA suggests the opposite should occur. e.g. the stop automatically buys when TA suggests there should be a sell. I'll try to look for examples over the next few weeks.

Thanks for the continuing commentry CM and also the rest of the regular posters.

Must go now B4 the boss catches me slacking on works time !

Regards

Bill

 

[TraderTony]

Sick in bed - caught the lurgy off the kids. Didn't even feel up to smuggling the laptop under the duvet for a couple of quick ones so things must be bad. Didn't look like I missed much though.

 

[justyn]

"Timing is Everything"
That pattern at C for you to take the short occured at around 13:00 EST, in other words - lunchtime! If you are able to chart volume that too would have indicated a similar lack of interest.
Couple this with the fact that the FOMC meet tomorrow, a range of 120+ points the day before is most unlikely.

Hi Quercus,

taking a 3 pk div as an entry is a gamble entry - it doesn't always work. I agree I should have looked at the bigger picture and figured that we are trapped in a base at the moment before all the news and stuff due today.

I also agree about lunchtime, often the best trades are in the higher volume periods before and after lunch but you can also get some good entries over lunch, for example the other day (sorry no chart) a flag formed during this "quiter" time and around 18:30 the third touch on support combined with some divergence gave a good entry. Wait until 19:00 and you would have missed a big part of the move.

Let's see if we can break out of this base today, the big question is will it be up or down???

Good luck everyone.

Justyn.

 

[tradesmart]

Quite surprisingly, the futs are keen to keep the 60 point triangle going pre-market – strange!, normally they have only a passing interest in geometry at the best of times….

Maybe a 'trade the break' strategy could work (and watch out for false ones....!)

Meanwhile down at the trading shed, the shedcam has focused on the ghostly, smirking apparition of a dodgy old codger with an over inflated pension fund – it is tinged with green and spanning the treeline….

It must be a warning, an omen…..!!!!!!

Now let me ponder what this could mean……

 

[sall]

Spont on CM wish I could stick by the plan...here is what happened with my plan yesterday . As you know I was quite bearish yesterday still am in the gut, well when I saw the positive open I switched to go long 10408, and straight away knew I has made a mistake,and wanted to get out , luckily was out @ 10423. Then I just sat bone idle try to figure what is happening, I nearly closed my sell position yesterday when it was hovering around 10368...which didn't break. I 'm still short and not hoping or praying but going back to my original plan. Had some time to concentrate on some candle formations mentioned by Nison.. just discovered in the 10 min chart we have a "three mountains , or a three Buddha tops, we have a large Buddha in the middle and the saints sitting on both sides and me ,well I 'm sitting @ 10317 waiting for the Buddhas to acknowledge me and my patience..

Justyn for what it's worth here is my view, at that point C the Fibonacci' retracements indicated there was no conflunece , there would've been if it had stayed below 23.6 % it would've been a ripe short. From what I've learnt in any drop like yesterday if it rallies back above 38.2% line then we are headed north for sure. I have still a lot to learn on Fibonacci, but this confluence theory has helped me many times.I mean I would check which and how many signals are matching in this case trend line break,Fibonacci, MA crossovers were all against rsi divergence therefore would've gone long. Just have to use as much ammunition and tools confirming at the time, as possible.

Good luck to all , :cheesy:

 

[frugi]

Still no breakout! I'll wager this madam is going to shift a country mile when she finally escapes the consolidation. A small false upside BO today gave brief hope, but ended in disappointment.

I only traded once (apart from a little DIA fiddling toward the close) and went long once the small gap was filled soon after the open. Sold at the second high from yesterday as I wasn't expecting 'owt dramatic before Alan opened his leathery maw. Missed an easy short soon after, but the NDs weren't quite strong or long (timewise!) enough for me to squeeze the trigger. Stayed well clear of the Fed stuff and was glad as the V bottom around 19:20 must have run a few stops. Didn't want to short 10450 either cause if the BO had been real 20 pips would probably have evaporated before I'd had time to cover. Though perhaps I should have noticed the dec tri / rough 123 forming about 19:55 and shorted the break around 10428. Ah well it could have been a bull flag...

Have welcomed my old friend RSI back to the one minute fold, and hope to enjoy his divergences in tandem with those of Tick.

 

[ChartMan]

Pehaps sitting in the sidelines waiting for the fed rate news... Now we didn't budge an inch so the 1/4 was obviously expected.The longer the price sits there and the lower RSI/CCI drop, the better the chance of upside. Whichever way it goes, I guess it'll be a good'un.....
Sall, nice to see you've taken the Bhuddist faith :cheesy: For those taking a firm position, one way or the other, get ready to jump ship on this channel break if you're on the wrong side.AS Frugi say, it's likely to run a country mile.

 

[ChartMan]

Anther messy day with almost noting to get your teeth into.The best could have been that O/S at 395, but the fed rate news was just round the corner....

 

[ChartMan]

Counter Violent A cup and handle in any time frame is rare on the Dow. There might be resemblemces, like yesterday, but they don't stand up to scrutiny. It's just not a dow characteristic.
Bill Your explanation makes sense to me, taken in conjuntion with your strategy.

 

[Bill]

Hi

Entertaining visitors today and for the rest of the week but I couldn't resist posting the chart as I think it would have been just perfect. [ok yes, easy to say afterwards I know]. What a pity I couldn't trade properly today as I feel there was a good 60-70 points available but of course nobody's gonna believe that now are they....

All those arrows are not something from Custar's last stand btw.

Note the outer channel lines. They are set at ema100 +-30 and are meant to signify SR decision points and as you can see were significant today.


I did take one trade short @ 10425 with a limit order @ 10395 [whilst I was afk] which gave me +30.

Regards

Bill

PS TSmart. Could that be Greenspan hiding behind the Bush?


+-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

Plus lots of others now....(tba)

 

[sall]

Another short entry played today right at the peak, didn't hold it for long was out once it was below the 100 ema. I was quite confident yesterday with my plan and held my short from 4 days ago now..still having faith or buddhist faith at present as CM puts it rightly in this instance , for it to run the country mile downwards..Nice doji evening star on the 10 min chart..

All the best

 

[tradesmart]

The breakout from the long consolidation has certainly worked its magic and now every punter and his dog want a cut of the action…..!?

Some are describing it as ‘panic buying’….

10850 at least may be in the sights eventually, but it’s rarely a one way ticket, and now that we’re in the area of strong prior resistance/reversal, I’d be surprised if there wasn’t some kind of meaningful consolidation/correction before the next leg up….

But I have been surprised before….

and RSI/CCI aren't showing divergence yet..... :|

 

[ChartMan]

I'll just expand out the 10 min a bit tonight as it needs closer scrutiny. for once, I'm not sure I shareTS's view of 850... well not just yet anyway. The RSI RS switch lookes like it can't be sustained and I know that'll please Sall.. :cheesy:
Rsi is sittine right on support with no place to go but down. But then that's ok iF the price doesn't folow. Watch 350 and if that goes, watch 400.
After market futs. have already droped us back into channel.There's little room for upside so I expect a pullback.Question is where to?

 

[tradesmart]

I'm not sure I shareTS's view of 850... well not just yet anyway.

I'm giving it until Christmas Eve CM..........

I'm a great believer in the Santa Rally.......!!.......... :cheesy:

 

[justyn]

No trades for me today, too busy earning an "honest" living

We seem to have broken up from the consolidation but hardly at supersonic speed?

Lots of news due out tomorrow so let's wait and see.

Slightly off topic I know ..... our first baby was due today and her indoors is now in very early labour so I might be busy tomorrow delivering a bundle of joy rather than delivering a bundle of cash to the Dowman

Justyn.

 

[ChartMan]

Nice triangle breakout across the 32 horizontal with a 20 point pullback to support before taking off to T1. How perfect is that?. Topped off with the 3 pk ND top that wasn't so perfect, to the point where it was an Inv. H&S although there was still the divergence in RSI giving the appearance of a bump top really. An out between 70 and 80 would have been a nice 50 odd, even if you didn't get in at the a start and closed out early. Contrary to the 10 min picture, this looks like more upside tomorrow, having closed close to HOD. I wonder which will win?

 

[ChartMan]

Hey, Justyn. Congratulations!!! I wonder how long it will take you to figure out just how big a mistake it is having kids? 0-5 is the best time, so long as you take the time to enjoy it. From there on in, it's downhill all the way. Trust me, I know. :cheesy:
Serious good wishes to you and Mrs. Justyn.
TS Santa reminds me of me, but I can't say why. :cheesy: :cheesy: :cheesy: