Dow Intraday Charts 18 Octt - 22 Oct

[GKB]

Pat,
I use IB and a spread better.
IB are very good IMHO. They generally stick to prices quoted and do well on limit orders too. Easy to use platform for simple index / commodity pricing with level 2 info.

I had a small problem at first though .. may be relevant if you're UK based. I have a dollar account and transferred money in dollars. I paid the exchange rate from my bank, but the money was turned back into pounds within their banking system. It cost me another exchange spread to re-convert into dollars.

If you wish to transfer dollars, make sure you send it to their bank in US. This won't be relevant to you if you're in pounds OR using their bank in the UK routinely.

Graham

 

[hampy]

Blackcab, I wasn't around to see those in real time, but when I looked in at 1900 it looked a fair enough trade to me. I guess CM will say beware of taking div based trades too soon after the open. On other days they work a treat so with tight stops you should win in the long run.
In addition yesterday if you did go long on the 3rd pk, you soon saw it struggling to pass 64. As this then failed you could have got out for a small loss or even reversed to short.
All easy in hindsight of course :cheesy:

 

[maxpain]

9750 - 9400 - 9100 ???

Market will tell..

 

[ChartMan]

BlackCab Divergences should be used onlt to close a position, not opren one, unless you are the gambling type. Hampy expanded on that. I also maintain that opening divergences, especially PD's are to be treated with caution..... you can spend the day looking for bottoms off PD's that never deliver.

 

[maxpain]

Not good at all !

Posting this chart as it gives a good picture of the overall US markets - trend is broken and it´s down from here on.

 

[hampy]

CM, Interesting reply to Blackcab. It would appear that you feel ND more reliable than PD. I've not paid this any attention before. If this is true any idea why this should be?
Thx, hampy

 

[ChartMan]

CM, Interesting reply to Blackcab. It would appear that you feel ND more reliable than PD. I've not paid this any attention before. If this is true any idea why this should be?
Thx, hampy

No. The both have their pitfalls.
The open itself is the first pitfall. Whether there is PD or ND, one has to take care. If I had to choose, the open PD it the least reliable. Post open ND's seem to be much more predictable. However, the overriding consideration is that divergences are NOT a signal to enter a trade in the direction of the divergence. They are signals to close an open position from the opposite direction. IE if you are LONG, a 3 pk ND is a signal to close. It is neither a signal to reverse OR go short although with hindsight, it may appear to be the case sometimes.
To take a divergence as a signal in the same direction i.e. PD+ long, there has to be some other confirming signal- say a double bottom on 00/32/64 etc.
Where 3 pk ND falls over is in a " market only wants up" day.Then you can chase your backside after 3 sets of 3 pk ND's each making higher highs.That's why I say it's not a signal to take a position.( either PD or ND)

 

[ChartMan]

I wonder if Sall held the short.... a hell of a drawdown... but a reasonable reward if you caught the bottom. The divergence across 2 days may be enough to bring a turnaround, but we usually need three days....

 

[ChartMan]

Just a quick look tonight... self explanatory I hope. T1 is formed from the expanding triangle off 9800.Going back to divergences not being a signal to open a trade.... today's PD of 9800 was. A quick look at ES vol shows a distinct lack of interest at 1098 to push the price lower. The safe entry for this divergence was as the price crossed the D top resistance at 9830 and on through 32 and the 100MA. OK , you lose 20 -30 points, but you don't put yourself at risk either....

 

[GKB]

Posting this chart as it gives a good picture of the overall US markets - trend is broken and it´s down from here on.

Hi Maxpain,

I follow longer term charts using EW and I have to say the line drawn on your chart has no significance.
At any of the preceding lows one could have drawn a similar line and said the same thing ... except that the market bounced up hundreds of Dow points each time.

Of course we don't have to get a similar bounce this time ... who really knows?

Regards,

Graham :idea:

 

[blackcab]

Chartman - thanks a lot, that's very clear.

 

[Pat494]

Justyn and GKB
Many thanks for the advice

 

[maxpain]

Hi Maxpain,

I follow longer term charts using EW and I have to say the line drawn on your chart has no significance.
At any of the preceding lows one could have drawn a similar line and said the same thing ... except that the market bounced up hundreds of Dow points each time.

Of course we don't have to get a similar bounce this time ... who really knows?

Regards,

Graham :idea:

Well, it´s a matter of opinion. Yesterday they traded that index down to a point where we got a parallell line with the original TL I drew. Nothing to argue about. Rebounds (violent) often happens close to these support lines. What´s worse is that the trend has turned down (weekly - using those lines!) - the future will tell. I´m short anyway. There would be no market if we had the same opinion. EW is crap unless you use it afterwards and then it´s too late. Can´t make money backtrading. Take a look at Zoran G´s predictions - wrong all the way. Writing history doesn´t make you richer if it´s money you want to earn. Í don´t have any clue where they are dragging this market but with some experience you improve as a trader. My only problem is timing, but one slowly learns that too.
- anyway, have a nice day
/max

 

[maxpain]

have to add -

Using single techniques is the worst mistake you can do. Market can go two ways and what determines where it´s heading are the derivatives. I personally find traded volumes of puts/calls very usefull. MM´s normally move the underlying stock in opposite direction of what you as a trader among all others believe it should go. MM´s make money and in order to do that they have the power to move even heavy stocks. As an example - yesterday Ericsson options were traded at a ratio of 10:1 calls. I bought puts off course. This is no Kindergarten. I mix candles, trading patterns, Gann, Fibonacci in a mix to try to predict the market. Not easy at all. I´ve been rather successfull recent year having passed the most expensive education the years before. I estimate my earlier losses to about £300k. Nobody talks about losses - only how much they earn. As an option trader I have the knife at my throat cause mistakes are extremely expensive when you are wrong.
/max

 

[GKB]

Hi Maxpain,
Thx. for your replies.
Appreciate our divergence of opinion. It'll be good to test our opinions and hence "indicators" on this thread. If I'm wrong you'll hear me saying it ... if I'm right ... well you'll hear that too.

I use EW, marketvolume and it's derivative analysis, and usual TA. Personally I usually take a contrarian stance ... suits my personality

Good luck with your trading, we'll chat more.

Regards,

Graham

 

[sall]

CM and all, yep I did hold and sweated it out closed at 9805 but never again, I don't really want to pat myself on the back either, never again. Hence yesterday I didn't even trade. Starting fresh today as I have a couple of hours.Thanks for the thoughts..

 

[justyn]

Difficult to get a clue where we are heading right now IMO.

It looked like a bear flag, but has that now failed as we have pulled back up too much?

Also looked like an "Adam and Eve" double bottom at 9800 with the sharp spike down on Wed and the rounded bottom yesterday.

 

[justyn]

Yesterday's 1 min chart showing the push up from 9800.

Looks like it could be a bull flag at the end of day that will take us up through 9900?

Good luck everyone!

Justyn.

 

[sall]

Just quick query, CM I had a chance to digest your comments in response to 'hampy's valid question.When looking at Volume how do you interpret it for a signal, in conjunction with other signals of course, do you use sell and buy volume separately or don't bother with splitting and look at it as a whole some force up or down? If so am I correct in saying when you see a lot of high spikes the effect on the price is usually a few moments later?

Thanks in advance

 

[justyn]

Sall

do you use sell and buy volume separately or don't bother with splitting

What do you mean by "sell and buy volume"? In every transaction there is a buyer and a seller.

Justyn.