Not exactly WJE. You need to look for 3 lows and 3 highs within a triangle that will form the resistance and support line triangle. These obviously must be in sequence, h,l,h,l,h,l or vice verca. Clearly that open triangle that you saw doesn't fit the rules. BUT it is a loose triangle, and as such I would expect it to deliver a target, which I make as 9585 -(9595- 9540) = 9530. It didn't make it... There is a clear difference between the expectation of a triangle breaking out in a particular direction, whereby you might try and jump onboard at the third peak or trough thus gambling on the outcome, and deriving a target from a loose formation as we had yesterday. I saw no expectation of a breakout because I never considered the triangle. Everyone sees things differently as you know. All I saw was the triple top etc.
Chartman, I must echo the thanks for the charts and also the excellant tutourial, plenty of food for thought there.
Trying to apply the rules today about the only thing I spotted was the bullish triangle that formed with first H at 1630 and 1st L at 1705, with a target of 30-35 points. RSI at the time of breakout was a bit high. If there was any CCI and RSI divergences they didnt jump out at me but it was nice to see the target hit (eventually). Persumably you would have made this a half size entry and add at one of both of the pull backs to the 100EMA?
With the benefit of hindsight the break up from the channel at 1457 with preceeding PD on the CCI was a beauty but I didnt see it at the time.
I would welcome your comments on the above analysis
thanks again
Neil
Trying to apply the rules today about the only thing I spotted was the bullish triangle that formed with first H at 1630 and 1st L at 1705, with a target of 30-35 points. RSI at the time of breakout was a bit high. If there was any CCI and RSI divergences they didnt jump out at me but it was nice to see the target hit (eventually). Persumably you would have made this a half size entry and add at one of both of the pull backs to the 100EMA?
With the benefit of hindsight the break up from the channel at 1457 with preceeding PD on the CCI was a beauty but I didnt see it at the time.
I would welcome your comments on the above analysis
thanks again
Neil
So it turns out that 9550 was a real strong support. I've now adjusted the channel width to reflect today's action. I'm not keen on thin channels as that allows big moves that can catch the unwary.... and reward the diligent. The RS Switch did the biz, nicely but now we're in uncharted territory and you'll have to fly by the seat of your pants. No near resistance to work off so watch for tops and out. The bonus here is that channel support will very quickly meet horizontal support at 9600 tomorrow and this will be a solid point to watch. The RS Switch is done and is now reversing into an SR Switch that may well deliver tomorrow. Play the channel and plan for a drop to channel support. I can't see a channel break to the upside, that would need a huge push.
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Lovely day for an easy 100+ points. Trading the 100 MA and walking away was the order of the day. not a lot in the way of clear cut targets but the real clue came from ES`Z volume ( S&P500 futures) as the dow tested 9600. The huge volume showed that 9600 would ( should) break and it did. Confirmation was by way of the two small pullbacks to 9660 before setting off again. First real notable target was from the pullback at 9620 giving a target of 9640 that failed. Notice that it managed to creep just above 9632 to 9636. A secondary clue that this move would not continue beyond target.... The Magic numbers 32 and 64 should play an important part in your analysis.... Note here also the RSI strength at par 1:1.... no need to panic either way... Now note the down move from 9636 to 9610 and touching the 100MA. Here was the real clue- RSI /Price ratio was very weak. 84- 22 on RSI for 26 points lost- 2.3:1. That told me that this down move was very weak and there would be no more down... At RSI 22, how much lower could it go anyway? So holding was the right choice, and sliding up the 100MA into a 3/4 peak ND top and an out for just on 100 points. And the rest into the close? Who cares that there was another 10 points on offer?
Unusually, CCI had ND too.
Note the action through the 9632 line ... It either gets tested or it flies through. If it fails, where is it going? BAck to support. Where's that? That's for you to know and make use of. Today it was the 100MA line. Next time it may be XX00.....
Today's entry? Within the dreaded first half hour? Yes, but with sound reasoning. The mini double bounce off the 10 min up channel support line drawn in from yesterday. Had this failed, I would have been looking for a bounce at 9532.
Unusually, CCI had ND too.
Note the action through the 9632 line ... It either gets tested or it flies through. If it fails, where is it going? BAck to support. Where's that? That's for you to know and make use of. Today it was the 100MA line. Next time it may be XX00.....
Today's entry? Within the dreaded first half hour? Yes, but with sound reasoning. The mini double bounce off the 10 min up channel support line drawn in from yesterday. Had this failed, I would have been looking for a bounce at 9532.
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Robber- I wouldn't class that as a triangle that I would be waiting to pounce on..... as discussed earlier on in this thread. As it turns out , the target was only 20 points or so, and you would be right in taking a half stake, and adding. I would have added as it flew through 32. The fact that an ND top developed should not deter you from making the best chioce at the time. You never know how a move is going to develop, in this case it was not big. Another time it could be 100 in the bag. Just remember that hindsight plays a major part in anyone's analysis . It's what you learn from that analysis and how you apply it the next time you see it, is what really matters. Recognising that a 3 peak ND top is always an out no matter what is very important, no matter what you think the market may do. It is easy to take another trade if the move continues, as it does so often in a strong bull market. Tonight's close at HOD should see some more upside tomorrow, but just remember that we're at channel resistance.That means a battle.
CM, was that a 3pk ND between 15.00 & 15.30 ? Completely threw me, went short on that and the fact that it had just bounced back from 9600 (like on prev occasions) - the rest is history - kept holding on as it tested 9600 - should have closed but didn't and saw it fly. By the time I decided to close it was at 9632 - thought it had made that target and went long - doh ! Closed that and then went long as it bounced of 100MA to get back a few points.
Had missed the opening entry and didn't play the triangle 'cos it was so close to 9600 and with the bias and spread figured it wasn't worth the risk.
Had missed the opening entry and didn't play the triangle 'cos it was so close to 9600 and with the bias and spread figured it wasn't worth the risk.
tradesmart
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Thanks for the daily analysis/advice ChartMan - it's certainly adding many ££££$$$$$ to my account!!
Noting your comment to be ready for a pullback today and the falling RSI/CCI with the price rising into a bear wedge on the 10min chart appears to confirm this, but don't forget your stop-loss guys- they might catch Saddam today!?!
Regards and successful trading,
TradeSmart
Noting your comment to be ready for a pullback today and the falling RSI/CCI with the price rising into a bear wedge on the 10min chart appears to confirm this, but don't forget your stop-loss guys- they might catch Saddam today!?!
Regards and successful trading,
TradeSmart
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re mombasa`s post. I also went short on the negative divergence around 9600. I have learnt, with hindsight, about market manipulation via this link from another bb
http://www.investorshub.com/boards/read_msg.asp?message_id=578076
I was very interested that cm mentioned volume on the es at that point. Something to bear in mind at important levels
http://www.investorshub.com/boards/read_msg.asp?message_id=578076
I was very interested that cm mentioned volume on the es at that point. Something to bear in mind at important levels
WJE, no I haven't dismised it, I just don't have time to retrace all my comments. On the other hand, I believe there is not too much relevance to be placed on what happened a week ago......or what I thought might happen a week ago. My comments are mainly to make others aware of things they may not have seen or considered.
Mom- I missed that 3pk ND Lesson- dont go short on a 3pk out!!! you too KAT.... Iv'e said it before, an ND top is NOT an invitation to go short. Wait for further confirmation. Yesterday was by way of ES volume. I do understand your reasoning though, but you have to admit, you jumped the gun. Patience is needed. There is no rush to lose points is there? And taking a later entry for a smaller profit must be better than taking any size hit.
Mom- I missed that 3pk ND
Lesson- dont go short on a 3pk out!!! you too KAT.... Iv'e said it before, an ND top is NOT an invitation to go short. Wait for further confirmation. Yesterday was by way of ES volume. I do understand your reasoning though, but you have to admit, you jumped the gun. Patience is needed. There is no rush to lose points is there? And taking a later entry for a smaller profit must be better than taking any size hit.
A conflict of interests.... too much too quick, leading to down, or a case of closing at HOD and more to come. Maybe Futs expiry played a part...... I was expecting more to come as a continuation from yesterday's HOD, as it often does. The opening triangle and lower high at 9675 soon confirmed the first theory. Although strictly NOT a triangle formation, we still get a target of 9625. Just touching it means we should go up. Following this, a double top/ inverse "W" giving target T2. Note coupled with ND on RSI. Note ND does not always have to show as higher highs in the price. It can be like today, where the tops are level in the price, but clear lower highs in RSI. Dropping 5 points below target, followed by a hasty recovery signaled the end of the move. No PD here. Nice RS Switch on RSI to confirm a long with a sweet little pullback to support on RSI . Finally , a quick test of 32 and then a fly through into an ND top and out. Not a bad day, fairly easy to trade, and little in the way of whipsawas to catch the unwary.
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Chartman, another handy analysis, thanks for the posting.
Only an observation as I know you dont trade directly off the 10min but is that ND I see on the 10min RSI and CCI from the peaks of the 17th? If so should we expect a pullback early next week?
On the 1min chart I missed the double top but spotted a 'gamble trade' from the same point; I had an uptrend from the 9625 low with associated RSI ND. One thing I cant figure out was how you derived the the T2 target. Could you elaborate? edited comment; ah, I think Ive got it, are you still using the mouth of the triangle to give a target from the double top?
Finally I notice that this doesnt get a mention in your tutourial but in virtually every case when you mark a trade point not only is it on the right side of the 100EMA but the EMA is also trending in the direction of the trade. Is this something you work to or just coincidence?
thanks again for the insight.
Neil
Only an observation as I know you dont trade directly off the 10min but is that ND I see on the 10min RSI and CCI from the peaks of the 17th? If so should we expect a pullback early next week?
On the 1min chart I missed the double top but spotted a 'gamble trade' from the same point; I had an uptrend from the 9625 low with associated RSI ND. One thing I cant figure out was how you derived the the T2 target. Could you elaborate? edited comment; ah, I think Ive got it, are you still using the mouth of the triangle to give a target from the double top?
Finally I notice that this doesnt get a mention in your tutourial but in virtually every case when you mark a trade point not only is it on the right side of the 100EMA but the EMA is also trending in the direction of the trade. Is this something you work to or just coincidence?
thanks again for the insight.
Neil
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Robber. Yes, we have ND on the 10 min chart so I would expect a reversal of some sorts soon. It's very hard to predict this on a 10 min chart as to exactly where the top will be- unlike the 1 min chart. Maybe I should be looking for 3 peaks..... which we have.
T2 target is from the inverse "W" ( double top).
The 100MA forms a very safe reliable indicator of when to make a trade. Like all MA's it's not super profitable, it's not always the answer, BUT it does form the basis of safe trading for beginners and a starting point whereby you stand a reasonable chance of a winning trade.
T2 target is from the inverse "W" ( double top).
The 100MA forms a very safe reliable indicator of when to make a trade. Like all MA's it's not super profitable, it's not always the answer, BUT it does form the basis of safe trading for beginners and a starting point whereby you stand a reasonable chance of a winning trade.
"Just touching it means we should go up."
Not sure what u mean by the above CM.
Yes, u're right, did jump the gun - as always, it's trying to beat the bias that does me in - gonna have to learn to ignore that.
Never mind, just clicked - pullback at the very least right?
PS, gonna go thru all the past charts and study the 3 pk ND and confo of short entry bit - as opposed to blindly going short.
Thx mate. You're a star !
Not sure what u mean by the above CM.
Yes, u're right, did jump the gun - as always, it's trying to beat the bias that does me in - gonna have to learn to ignore that.
Never mind, just clicked - pullback at the very least right?
PS, gonna go thru all the past charts and study the 3 pk ND and confo of short entry bit - as opposed to blindly going short.
Thx mate. You're a star !
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There's two parts to a triangle target. 1 is time, the other is price. Take the mouth size. Add it or subtract it from the breakout point. In this example take it away from 9664
. That's the price target. Take the apex and draw a perpendicular. Draw a parallel line to the support or resistance line, depending on which way the triangle has broken.Where they intersect is the time target.In this case the time target and price target don't meet - that's normal. The text books say they should intersect. You'll be lucky if they do. Others say that point X will be your exit point. This forms a parallelogram. When estimating my targets, I always use a ball park figure. There is absolutely NO point in being exact. the nearest 5 point or so rounded either way is perfectly good enough. Your'e looking for a yardstick of likely performance, not an Einstein calculation. When Targets are met ( delivered) it is time to make another decision - whether to stay in the trade, or exit. If the time line passes and the target is not met, then it is unlikely to.Thus it may prompt an exit. Geometry and symmetry play an important part in DOW analysis.
. That's the price target. Take the apex and draw a perpendicular. Draw a parallel line to the support or resistance line, depending on which way the triangle has broken.Where they intersect is the time target.In this case the time target and price target don't meet - that's normal. The text books say they should intersect. You'll be lucky if they do. Others say that point X will be your exit point. This forms a parallelogram. When estimating my targets, I always use a ball park figure. There is absolutely NO point in being exact. the nearest 5 point or so rounded either way is perfectly good enough. Your'e looking for a yardstick of likely performance, not an Einstein calculation. When Targets are met ( delivered) it is time to make another decision - whether to stay in the trade, or exit. If the time line passes and the target is not met, then it is unlikely to.Thus it may prompt an exit. Geometry and symmetry play an important part in DOW analysis.
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Austin&Liz
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CCI
Hi Chartman
Very impressed with your analysis. We're currently still learning & it's great to get good advice. We're spreadbetting with Deal4Free at the moment but unfortunately they don't offer live CCI data for the DOW & S&P - could you recommend a good source for this ?
Thanks
Austin & Liz
Hi Chartman
Very impressed with your analysis. We're currently still learning & it's great to get good advice. We're spreadbetting with Deal4Free at the moment but unfortunately they don't offer live CCI data for the DOW & S&P - could you recommend a good source for this ?
Thanks
Austin & Liz