You say that you have a handle on moving averages.
They tell you the underlying trend of the market.
And the first lesson is that you should only take trades in the direction of the trend.
Next useful step is to look at your favourite chart
and try and spot previous areas of obvious congestion in prices.
These are areas of support/resistance.
See how current prices are reacting to these levels.
Are prices hesitating or push cleanly through them. This can tell you a lot about the characteristics of the current move in prices.
Currently, the FTSE is having short term problems overcoming the trendline off the 4602 peak (see my previous posts) and may even be aware of the low congestion evident on the 27/04/04.
Obvoiusly the resolution to this hestitation may tell a lot more about the potential of the current rally from Tuesday morning.
They tell you the underlying trend of the market.
And the first lesson is that you should only take trades in the direction of the trend.
Next useful step is to look at your favourite chart
and try and spot previous areas of obvious congestion in prices.
These are areas of support/resistance.
See how current prices are reacting to these levels.
Are prices hesitating or push cleanly through them. This can tell you a lot about the characteristics of the current move in prices.
Currently, the FTSE is having short term problems overcoming the trendline off the 4602 peak (see my previous posts) and may even be aware of the low congestion evident on the 27/04/04.
Obvoiusly the resolution to this hestitation may tell a lot more about the potential of the current rally from Tuesday morning.
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Last edited:
Sharkfin,
Just some keys questions that i asked myself when i chosen i my averages before moving on to find other indicators.
How many averages to use?
Wot lengths and why ?
Wot timeframe and why?
How do i plan to use them to trade? i.e. crossover , pullback or just confirmation of trend.
All depends, imho, on your trading style.
Just some keys questions that i asked myself when i chosen i my averages before moving on to find other indicators.
How many averages to use?
Wot lengths and why ?
Wot timeframe and why?
How do i plan to use them to trade? i.e. crossover , pullback or just confirmation of trend.
All depends, imho, on your trading style.
MGBRoadster
Pleased it held for you. I have been looking at your comment that the first day of the month is usually worth a long and produce the following which is the end of day result for the ftse for the first trading day of the month. I also show the day of the week to show if it makes any difference.
FTSE 2003 Result for first trading day of month
jan +70 tuesday
feb +122 monday
mar +29 monday
apr +72 tuesday
may -46 thursday
jun +81 monday
jly -67 tuesday
aug -59 friday
sept +43 monday
oct +78 wednesday
nov +45 monday
dec +67 monday
Total +435
2004
jan +33 friday
feb -10 monday
mar +45 monday
apr +25 thursday
may +57 tuesday
total +150
So your observation based on 1.33 years is correct. Why?
I have also looked at the dow but not as far back with the following results.
2003
sept +107 tuesday
oct +194 wednesday
nov +57 monday
dec +117 monday
total +475
2004
jan -43 friday
feb +11 monday
mar +94 monday
apr +15 thursday
may +88 monday
total +165
Again a good result.
What is the logic behind this result?
Regards
bracke
Pleased it held for you. I have been looking at your comment that the first day of the month is usually worth a long and produce the following which is the end of day result for the ftse for the first trading day of the month. I also show the day of the week to show if it makes any difference.
FTSE 2003 Result for first trading day of month
jan +70 tuesday
feb +122 monday
mar +29 monday
apr +72 tuesday
may -46 thursday
jun +81 monday
jly -67 tuesday
aug -59 friday
sept +43 monday
oct +78 wednesday
nov +45 monday
dec +67 monday
Total +435
2004
jan +33 friday
feb -10 monday
mar +45 monday
apr +25 thursday
may +57 tuesday
total +150
So your observation based on 1.33 years is correct. Why?
I have also looked at the dow but not as far back with the following results.
2003
sept +107 tuesday
oct +194 wednesday
nov +57 monday
dec +117 monday
total +475
2004
jan -43 friday
feb +11 monday
mar +94 monday
apr +15 thursday
may +88 monday
total +165
Again a good result.
What is the logic behind this result?
Regards
bracke
Last edited:
MGBRoadster
Pleased it held for you. I have been looking at your comment that the first day of the month is usually worth a long and produce the following which is the end of day result for the ftse for the first trading day of the month. I also show the day of the week to show if it makes any difference.
FTSE 2003 Result for first trading day of month
jan +70 tuesday
feb +122 monday
mar +29 monday
apr +72 tuesday
may -46 thursday
jun +81 monday
jly -67 tuesday
aug -59 friday
sept +43 monday
oct +78 wednesday
nov +45 monday
dec +67 monday
Total +435
2004
jan +33 friday
feb -10 monday
mar +45 monday
apr +25 thursday
total +93
So your observation based on 1.33 years is correct. Why?
I have also looked at the dow but not as far back with the following results.
2003
sept +107 tuesday
oct +194 wednesday
nov +57 monday
dec +117 monday
total +475
2004
jan -43 friday
feb +11 monday
mar +94 monday
apr +15 thursday
total +77
Again a good result.
What is the logic behind this result?
Regards
bracke
Pleased it held for you. I have been looking at your comment that the first day of the month is usually worth a long and produce the following which is the end of day result for the ftse for the first trading day of the month. I also show the day of the week to show if it makes any difference.
FTSE 2003 Result for first trading day of month
jan +70 tuesday
feb +122 monday
mar +29 monday
apr +72 tuesday
may -46 thursday
jun +81 monday
jly -67 tuesday
aug -59 friday
sept +43 monday
oct +78 wednesday
nov +45 monday
dec +67 monday
Total +435
2004
jan +33 friday
feb -10 monday
mar +45 monday
apr +25 thursday
total +93
So your observation based on 1.33 years is correct. Why?
I have also looked at the dow but not as far back with the following results.
2003
sept +107 tuesday
oct +194 wednesday
nov +57 monday
dec +117 monday
total +475
2004
jan -43 friday
feb +11 monday
mar +94 monday
apr +15 thursday
total +77
Again a good result.
What is the logic behind this result?
Regards
bracke
MGBRoadster
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Hi Bracke
I got interested in the first day of the month when I read http://observer.guardian.co.uk/cash/story/0,6903,1086060,00.html which said:
"Spread betting expert Vince Stanzione says:
'Markets are often bullish on the last day of the month and the first three or four of a new month, possibly because this is when people's pension contributions are invested by the fund managers,' ..."
Now old Vince has had a bit of bad press on these boards (LOL), but I'm not complaining so long as I'm making money :cheesy: , and maybe he's right.
I think most of the big gainers have the open as the LOD, so I move my stop to breakeven asap.
I got interested in the first day of the month when I read http://observer.guardian.co.uk/cash/story/0,6903,1086060,00.html which said:
"Spread betting expert Vince Stanzione says:
'Markets are often bullish on the last day of the month and the first three or four of a new month, possibly because this is when people's pension contributions are invested by the fund managers,' ..."
Now old Vince has had a bit of bad press on these boards (LOL), but I'm not complaining so long as I'm making money :cheesy: , and maybe he's right.
I think most of the big gainers have the open as the LOD, so I move my stop to breakeven asap.
MGBRoadster
Member
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bracke said:
LOD = Low of Day (I think!!!)
Not to sure about this latest move. Hugging the bottom. Also got some divergence on RSI. Got next resistance at 4,565.
Good luck to all still holding. I got out of my short for b/e. I'll post later. As for now...some quick lunch and tea b4 the US.
Good luck to all still holding. I got out of my short for b/e. I'll post later. As for now...some quick lunch and tea b4 the US.
I have to confess to being a lurker on this thread. FWIW, I think this rally will run out of steam. Today, declining stocks outnumber advancing stocks 574:525. Also when you look at the FTSE100 chart alongside the FTSE250, you wonder whether they are actually in the same market. The Mid 250 chart on the left doesn't look particularly bullish to me. The April high in the FTSE100 was not confirmed by the Mid 250. A significant part of todays rise must come from VOD - up 3.75, or 2.6%.
I guess it depends on your time frame. I am more interested in the next 12 trading says until options expiry rather than the next 12 mins!
I guess it depends on your time frame. I am more interested in the next 12 trading says until options expiry rather than the next 12 mins!
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I don't think VS can take any credit for his commments about the first few trading days of the month. The original research was done by Norman Fosback and Arthur Merrill, and is described in Gary Smith's excellent book, "How I Trade For a Living."
This explains that the last trading day of the month and the first 4 trading days, plus the 2 trading days before a market holiday are usually +ive. Between 1928 and 1994, if you had only held the S&P500 for those days, representing 28% of all trading days, you would have turned $10k into $4.6million. If instead you had invested for the remaining 72% of days only, you would have turned $10k into $569 by the end of 1994. That's not a typo!
Recent research has updated this to include the 2nd to last day of each month, and the 5th trading day of each month, but excluded if these are the first trading day of the week.
Additionally, the period between 2 days before thanksgiving and ending on the 5th trading day of Jan accounts for 40% of the growth in the S&P500 in the last 70 years. The month end and pre-holiday trading days lieing within this 7 week period account for 45% of market entire price return over that 70 year period. Mind boggling stuff!
This explains that the last trading day of the month and the first 4 trading days, plus the 2 trading days before a market holiday are usually +ive. Between 1928 and 1994, if you had only held the S&P500 for those days, representing 28% of all trading days, you would have turned $10k into $4.6million. If instead you had invested for the remaining 72% of days only, you would have turned $10k into $569 by the end of 1994. That's not a typo!
Recent research has updated this to include the 2nd to last day of each month, and the 5th trading day of each month, but excluded if these are the first trading day of the week.
Additionally, the period between 2 days before thanksgiving and ending on the 5th trading day of Jan accounts for 40% of the growth in the S&P500 in the last 70 years. The month end and pre-holiday trading days lieing within this 7 week period account for 45% of market entire price return over that 70 year period. Mind boggling stuff!
