SLA approach for NIFTY50 Index

[Insursi]

When is the supply line broken?

2500 to 2550

 

[dbphoenix]

You're referring to May '15?

 

[Insursi]

You're referring to May '15?

The first one 2450 2500 (sep 15) and then 2550 (may 15)

 

[dbphoenix]

The first break on your weekly chart is May '15. As September follows May, September must be the second break. But in May, you won't know that. May is then a potential trading opportunity. So what do you do then?

 

[Insursi]

The first break on your weekly chart is May '15. As September follows May, September must be the second break. But in May, you won't know that. May is then a potential trading opportunity. So what do you do then?

Good question!!

Unfortunately I was unaware of these gold etf stuffs until last month (In India ETFs are not common as like in USA). I have only few years of active participation in the market and sofar not experienced bear market stuffs such as where smart money move from equities...and so on..

I still hope, the ongoing rally in global markets are countertrend rallies....so much more space left for gold to catch up.

 

[Insursi]

The first break on your weekly chart is May '15. As September follows May, September must be the second break. But in May, you won't know that. May is then a potential trading opportunity. So what do you do then?

When the supply line broken May 15th and price was not moving much higher indicating potential overbought level so it could be good shorting opportunity. But the story is different entirely from August 15 to Dec 15 where the price had spent most of the time on the supply level--indicating supply has been arrested. Am i right here? We could say that accumulation period is over in this range, from Jan 16 (long opportunity) onwards price inching up where demand is picking up now..

 

[Insursi]

I am re-posting db's interesting posts for my diary though very basic one

Perhaps you'll find the Wyckoff course material easier to understand and use since the TL days as I've cut it from 500p to a little over 80.

Remember that the SLA is based on Wyckoff's work and that both take a top-down approach. The SLA was written with futures in mind and begins with the weekly and works its way down. Wyckoff, however, was focused on stocks and commodities. To get to those stocks, however, he began with the trend of the market, then found the strongest groups, then the strongest stocks in those groups. Beginning with stocks without accomplishing what leads up to the stocks means a lot of wasted time and effort.

As for the instrument, if it's stocks, you needn't go further than the daily to determine the trend of the market. Analyzing anything less serves no purpose. If the instrument is futures, then the futures are the market, and those are approached as explained in the SLA pdf and in the SLA Book (the SLAB): weekly, daily, hourly, down to whatever interval you prefer to trade.

So if you intend to trade stocks, 1m charts of the SPY or even the SPX serve no purpose. Determine the trend of the market, find the strongest groups, etc, as explained in the Group Charts section of the Wyckoff thread, post 29 and following. This is also addressed in the "Burrow" section of your book. Whether or not the SLA will be helpful with stocks remains to be seen as stocks are subject to gapping. Futures are a different path. I don't recommend trading both. After three years of study, it should not take you long to decide which path is the most appropriate.

Db

 

[dbphoenix]

First, if you're going to make progress with this, you must learn how to read a chart from left to right. "Today" is the result of everything that happened before. If you don't begin at the beginning, you'll end up in the wrong place, always entering late, usually on the wrong side.

Second, you're introducing a lot of irrelevant baggage into this, like "hope". This isn't about hope. It's about drawing lines.

Third, even though this is not a proper instrument for the SLA, this is what you should have done according to the SLA in May and June.

 

[Insursi]

First, if you're going to make progress with this, you must learn how to read a chart from left to right. "Today" is the result of everything that happened before. If you don't begin at the beginning, you'll end up in the wrong place, always entering late, usually on the wrong side.

Second, you're introducing a lot of irrelevant baggage into this, like "hope". This isn't about hope. It's about drawing lines.

Third, even though this is not a proper instrument for the SLA, this is what you should have done according to the SLA in May and June.

I apologize for mentioning hope and believe it won't be repeated.
BTW I posted the chart of Goldbees only to discuss about the possibility of SLA and personally, I don't have any trade on it since it way away from the buying signal.
Last couple of days I was sick and not able to concentrate on market/chart.

Heres update for Nifty50

Weekly: Bounced of from the oversold level to median of TC now.
Daily: Trend is up. Nearing SL 7600 this is where price got rejected past couple of times. Worth to watch this level.
Hourly: Approached first supply level 7500. No sign of weakness yet, if it occurs then potential shorting opportunity with minimal risk.

 

[dbphoenix]

Your weekly chart is much improved. However, you're misusing "supply line" and "demand line". Supply lines are not meant to mark resistance. Demand lines are not meant to mark support. Support and resistance are in constant flux, and drawing lines to designate S&R is generally not a productive use of one's time.

Supply lines and demand lines are meant to track the balance and imbalances between demand and supply. They track the course of price. Therefore, they should be diagonal.

You'll note on the weekly chart below the difference between a trend line and a supply line. The supply line shows a departure from the trend and provides you with plenty of notice that the course of price is undergoing a change. You can also see that you had two weeks of opportunities to trade the oversold condition. The hourly chart shows the last two long opportunities. Any long thereafter carries much more risk.

So your choices are to wait for the demand line to break and to short a retracement or to wait for price to reach the upper limit of the weekly channel and trade a reversal. The key word in both scenarios is "wait". Learn patience.

All this is in the pdf, of course. I suggest you continue studying it.

Db

 

[Insursi]

Nifty50
Hourly: TL broke but price is in TR. No trade yet.

 

[dbphoenix]

This is not an hourly chart.

 

[Insursi]

sorry. I didn't realize. I just clicked 1hr chart on investing.com web and drawn the lines forgot to reconfirm whether its correct time frame or not.

Heres the correct chart

 

[dbphoenix]

sorry. I didn't realize. I just clicked 1hr chart on investing.com web and drawn the lines forgot to reconfirm whether its correct time frame or not.

Heres the correct chart

This is the index chart.

You really need to stop trading until you have become much more familiar with your trading instrument.

Db

 

[Insursi]

This is the index chart.
Db

As I have mentioned couple of times in the past (post 41-45), I do trading in futures but the drawback heres that I cannot get yearly data. So I have to rely on index chart.

This is the index chart.

You really need to stop trading until you have become much more familiar with your trading instrument.

Db

you are correct. Lot of whipsaws I could see on the chart from switching one terminal to another. Now no trade and only observing the market.

Heres Nifty50 update

Daily: price is consolidating near the DL.(left side chart-index)
Hourly: almost a week price is in the range 7420-7550. (right side chart- march fut)

Conclusion: I prefer to be on sideline until it reaches UC or else breaking down TL (inside the TR) and enter on the RET.

Note: Personally I won't make any trade (may be paper trade) but this is my observation.

 

[Insursi]

I am posting chart of Tata Steel for understanding W-principle.
I have marked required information on the chart.

 

[Insursi]

I am posting chart of Tata Steel for understanding W-principle.
I have marked required information on the chart.

One mistake in the above chart i.e. instead of overbought I printed oversold.

 

[Insursi]

Nifty50 update as of 18th March 2016 as follows

Daily: Uptrend intact which started on Feb 29th. Currently, few points above the supply zone (Feb 1st and January 18th high's). Next supply level I am looking for 7750-7800.
Hourly: Price above TR finally.
15mins: Marked my observation on the chart itself (blue line - long, redline- short)

 

[Gring0]

Insuri,

You could also draw a DL on the daily. That will give you a better read of what's happening, especially if prices weaken.

Gringo

 

[Insursi]

Insuri,

You could also draw a DL on the daily. That will give you a better read of what's happening, especially if prices weaken.

Gringo

Thanks Gringo. I do it from hereon.