FTSE 100 October 2004

[peterpr]

I am very wary of comparing charts and drawing the conclusion that because one may appear to be similar to another the same will result. I think each chart should stand on its own two axis and be analysed as such.

Wariness is undoubtably commendable - I wish I was a little more wary sometimes! BUT

Charts are the footprints of real money (can't remember where I read that but I reckon it's pretty accurate). They show the dynamics of greed/fear interaction in the market over time. Pretty much every technical charting system tries to identify patterns and uses them to predict to the future.

For that reason I reckon that comparing the present with similar past patterns is (at the very least) helpful - it pretty well defines charting TA after all.

Which is not to say Pratbh's observation is in any way conclusive - because there are host of other parameters (not least volume, but also MA's and all the usual indicators applicable at that time) which need to be overlaid to see how far the congruence holds. The more that do, the stronger the predictive value - but it still aint foolproof.

 

[barjon]

Jon,

Took a bit but no problem.

I attach a document from the e-CBOT which outlines Liffe Connect and how it all works

Good Trading and best regards

Paul

paul

thanks again - funny that after nearly 30 years at this I'm only now taking a deep interest in volume and precisely how the market works

I was struck by

• Market orders are executed at the best price(s) available in the market when the order is
received until all available volume at that price has been traded. Any remaining portion of
the order then executes at the next best price and so on, until all the order volume has been
filled. Any residual volume from an incomplete market order is immediately cancelled.

in the e-cbot document. In a sense I suppose (?) the system is acting as market maker and trying to keep its inventory to zero.

good trading

jon

 

[peterpr]

Jon

Here's another slant - which I'm sure you've thought about.

Considering a bull run: the thing that fuels it as it progresses is not so much bullish sentiment as the progressive capitualation of the bears. Forced short covering adds to volume until there are no bears left - that's when the market turns.

Similar in reverse as with most TA

 

[barjon]

Chaps,
Just something very interesting that I noticed while comparing the current rally with the January 2000 top. The pattern is exactly the same. Is a huge crash coming?

PS. In case you are interested, I am still holding my short positions.

Maybe. The "crash" from Jan 2000 wasn't precipitate though. It ranged sideways with 3 bounces for 9 months. The last in September 2000 came fairly close (135 points) in testing the January high. It didn't break through the earlier support August 1999 until Feb 2001 - over a year later. IF it repeats we might expect a few bounces from around the 4300 level and a drop through that in time for Christmas 2005.

Meanwhile I'm still motoring north and loosened stop a bit. Yesterday's candle was "indecisive" (like todays action so far ) with a slightly positive bias. Pausing for breath or finding the air too thin up here - ah, that's the question

good trading

jon

 

[bracke]

Wariness is undoubtably commendable - I wish I was a little more wary sometimes! BUT

Charts are the footprints of real money (can't remember where I read that but I reckon it's pretty accurate). They show the dynamics of greed/fear interaction in the market over time. Pretty much every technical charting system tries to identify patterns and uses them to predict to the future.

For that reason I reckon that comparing the present with similar past patterns is (at the very least) helpful - it pretty well defines charting TA after all.

Which is not to say Pratbh's observation is in any way conclusive - because there are host of other parameters (not least volume, but also MA's and all the usual indicators applicable at that time) which need to be overlaid to see how far the congruence holds. The more that do, the stronger the predictive value - but it still aint foolproof.

peterpr

Comparing patterns may be helpful but it depends on what aspects of the patterns are being compared. To simply compare one graph line with another is not enough. As you point out there are a number of TA parameters that may be used depending on ones preference.

Why the need to compare, why not a judgement based on the current graph using ones preferred analysis. I favour price/volume analysis which as far as I understand it does not employ comparisons but uses knowledge and understanding to reach a decision. It is probably this preference which leads me to avoid the comparison route.

Regards

bracke

 

[barjon]

Jon

Here's another slant - which I'm sure you've thought about.

Considering a bull run: the thing that fuels it as it progresses is not so much bullish sentiment as the progressive capitualation of the bears. Forced short covering adds to volume until there are no bears left - that's when the market turns.

Similar in reverse as with most TA

mmm. Not all sellers are bears, of course, some just need the money!!

jon

 

[barjon]

been off piste today - so's everyone else by the look of it

Another uncertainty (with a negative bias) candle to end the week then, which all adds up to a shooting star candle on the weekly (bearish if confirmed by a significant down gap opening next week and/or a strong down move for the week).

On the upside we're already clear of 38% fib rally of the whole down move since 2000 high and there seems clear air until the fib 50% at around 5108. On the downside, for the daily, I've included 4 potential early support levels: 4660 (the gap); 4623 (mid point of long white candle); 4586 (base of the long white); and 4530 (swing low - which isn't a million miles away from a fib50% retracement of the rise from August at around 4510).

Should get a good move one way or the other next week.

good trading all

jon

 

[barjon]

Ever had the feeling you may be just talking to yourself

To judge from the weekend press you beary boys may be in business soon.

Saturday Times:

Crossed Lines that can be golden for investors

The ftse has just made a golden cross with the 50 day moving average crossing the 200 day when both are rising. On every occasion, a golden cross on the ftse has been followed by a period of rising prices.

Sunday Times

FTSE tipped to hit 5000 by Christmas

Shares have surged over the past few weeks and most experts think the rally will continue.


mmmmm!!!!

good trading

jon

 

[2468steve]

Hmmm..interesting...FTSE also made a golden cross in Nov 99.......just 1month before it's all time high..

cheers

 

[peterpr]

been off piste today - so's everyone else by the look of it

On the upside we're already clear of 38% fib rally of the whole down move since 2000 high and there seems clear air until the fib 50% at around 5108.
Should get a good move one way or the other next week.

jon

I'm not quite so sanguine about the 38% upside breach when the numbers are so big. Granted we've traded consistently above it since last Thursday, but the range has been small and only about .5% or so above the fib number. Also in Fib time scales there were just over 800 trading days between tne 2000 high and the 2003 low. 50% from there brings us to Wed/Thu this week and the DOW topped at 50% of its trading days retracement of the 2000-2002 bear.

I'm out of it right now but still looking for a major downturn before y/e and your w/e press quotes + loads of other 'irrationally exuberant' press comment only serve to reinforce that view.

I'm looking for a couple of closes above 4725 before conceding that we're on the way to 5000+. Otherwise I'll be looking for a ride back to the basement.

BTW - nasty riding accident last Fri - broken nose, teeth etc and consequently feeling a bit sorry for myself - hence not paying attention

 

[bracke]

barjon

Talking to oneself on this thread is part of the enjoyment. It has the advantage that you can reply to yourself in complete agreement with ones post. It's a ploy I have used here previously

I am sitting, watching and not trading. I do not know where this market is going in the mid term but I suspect it will not decide untill after the US election and even then maybe not until into 2005.

I will trade what I see but it is hard not to think that it cannot continue to defy gravity for a great deal longer.

peterpr

Very sorry to read that you have injured yourself, were you riding a bull or a bear.
Forgive the jest its just my poor sense of humour.

You have taken a 'pasting' of late, its not your time is it.

Irrational Exuberance, don't you love it. just like old times.

If ftse does manage to get to 5000 the dow will surely have to lend a hand.
The rise is one thing but think of the eventual drop.

Time to return to hibernation.

Regards

bracke

 

[barjon]

bracke

problem is I keep disagreeing with the posts from that idiot!!

peter

sorry to hear of your accident - no lasting damage I trust. You know what they say, get back up immediately but face the right way this time.

good trading

jon

 

[pb]

Aha !
Not bad not bad...

Is it THE fall, then?

 

[bracke]

Aha !
Not bad not bad...

Is it THE fall, then?

pratbh


Such is your desire for the market to fall that it may be considered ungentlemanly conduct and even bordering on subversive.

Could it be a retrencment before scaling the heights to 4800-5000 ?

Regards

bracke

 

[Hooya]

HI guys just thought I would say hello. just had a quick read through some recent posts. Everyone seems to be doing ok. Hope whoever subscibes to the livecharts.co.uk newsletter is enjoying it. It's taken a bit of time to get the new email system up but its now up so you can automatically register on the site and this week I will be adding in a new email address so that readers can email me direct. For those that likw wave s counts he is chart i did earlier. Count might be questionable but the point is that you can see how waves form within waves. Quite interesting don't you think.

 

[barjon]

HI guys just thought I would say hello. just had a quick read through some recent posts. Everyone seems to be doing ok. Hope whoever subscibes to the livecharts.co.uk newsletter is enjoying it. It's taken a bit of time to get the new email system up but its now up so you can automatically register on the site and this week I will be adding in a new email address so that readers can email me direct. For those that likw wave s counts he is chart i did earlier. Count might be questionable but the point is that you can see how waves form within waves. Quite interesting don't you think.

hiya hooya - long time no hear from

didn't know the livecharts site is yours - I make good use of it. Bracke might be interested in the "mind the gap" article.

hope your trading is still on top form

regards

jon

 

[Hooya]

its not my site its actually Lee's but hopefully the newsletter will keep the vistors coming so it is worth the time anfdeffort Lee puts into it. Im glad you find it useful. I started to go mad trying to post on 3 different boards at once so mainly on the ADVFN BB but still pop by but dont post as I wouldnt be around to get into a conversation. trading is going well. Still probably have too many "ideas" in my head which often make me pull out too early but still improving. I've this year as my "moving year" just as Tiger Woods calls day 3 or 4 of a tournament "moving day". So in theory this is where everything I have worked on in two years come together and things start to to develop exponetially again. Been takign less positions thats for sure.. maybe 7 or 8 a week. Basically cut out the " lets get back those four points lost on the previous trade" trade. :-0

 

[barjon]

well that's the second half of my long closed (at 20).

will this be a swing low or will you beary boys keep cheering

 

[peterpr]

well that's the second half of my long closed (at 20).
will this be a swing low or will you beary boys keep cheering

Jon

Stitches out tomorrow and a face that looks like I've done a couple of rounds with Mike Tyson. Still ability to concentrate is returning although impossible to smile (painful) only frown (soothing) - wonder if that's an omen??. Anyway I'm starting to look closely at the markets again

Still not entirely convinced that a major impulse down has begun - yet - but I am still expecting it this side of y/e.

One of the remarkable things about the last couple of weeks is the symetry between nearly all major US/Euro/UK indices into the turn last Thursday and since - almost lock-step again - even the Nikkei seems to agree though the Aussies are off on a trip of their very own - as usual!

Can't help feeling that strenuous efforts at support will be made in the US pre-election though, and it will be interesting to see how successful they are - with the fundamentals the way they are and rock-solid public complacency, it'll just result in an even harder fall after IMHO - and Jeremia that I am.

 

[peterpr]

I guess I should add that, as usual, that's my overview. Not talking about tradeable intra-day moves here - just my expected long, intermediate and shorst(ish) term directions for the world economy slipstreaming the US.