Thanks Iraj.
Where is market heading ? Short , Medium Term Grey's analysis
Thanks Iraj.
Glenn
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I wonder how many would be prepared to do what Iraj has done here. Very few, if any, I would guess.
Thank you Iraj.
Nope.
Unless im mistaken (which isn't at all unusual) Grey was medium term 'bearish' over the next few months due to various fundamental reasons, but became bullish yesterday expecting a rise for the next month or so?? Dow rallied over 300 points since his call
Unless im mistaken (which isn't at all unusual) Grey was medium term 'bearish' over the next few months due to various fundamental reasons, but became bullish yesterday expecting a rise for the next month or so?? Dow rallied over 300 points since his call
I'd love to know Grey1's logic-which gave me the confidence that the market has actually turned.
A few things which I had noticed for close to a month was that the market had stopped reacting badly to bad news-it would go down but recover by the end of the day-the panic seemed to have gone + FEDs action + weekly INDU heading up (this happened by mid Feb) + Daily INDU bottomed and started heading up on the 16th of this month.
These were all indicating a turn (apart from the CNBC analysts-although I find quite often the analysts almost repeat what Iraj says here only after a week or two...wonder how that happens..common guys who amongst you is a CNBC analyst..
)Raj
Grey1
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I will reply after trading hours to why I went LONG the market.( SWING ) .. This business is some times like a open book and there are days that I sit there and cry not knowing what the hell am i suppose to do as the market is more of a random than any thing else//.
Grey1
Grey1
Grey1
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OK .. Before we go any further I like to insist again that the secret of wealth is not day trading .. Only allocate small amount of your capital to day trading ..I said this in my seminar and you know what my views are to ward day trading .. If you really need to day trade then fair enough but if you are after MONEY , Wealth and a tall blonde to spend it for you, you must trade in the direction of the market in fundamentally weak or strong stocks, I know i am repeating myself but I have to get into your head and convince you .
Remember George Soros did not make 899Million day trading in 1 year.
OK why I went long .. I actually changed my view when i closed my shorts which goes back to some time ago which i posted my view on this BB.
1) INDU on monthly chart was OS and MACCI heading up
2) Apart from GE story market really did not sell off no matter what economic data was.
3) The leading sector stocks such as IBM , INTC, WALLMART ( trading @ 52 weeks high ) and to day GOOGLE have been major catalysts for other smaller cooperates. These leaders can paint a strong picture of the future trend .
4)Financial write offs are NO NEWS to the market,,,
5)Bernanke stood behind the bulls and acted decisively during the dull days. He made a mess of it last year but compensated it in 2008
6) OIL RALLY did not push the market down ..
I think we have enough reasons to go LONG don't you ?
SWING TRADE FUNDAMENTALLY STRONG STOCKS AND USE YOUR KNOWLEDGE OF TA TO OPTIMISE YOUR PROFIT...
Grey1
Remember George Soros did not make 899Million day trading in 1 year.
OK why I went long .. I actually changed my view when i closed my shorts which goes back to some time ago which i posted my view on this BB.
1) INDU on monthly chart was OS and MACCI heading up
2) Apart from GE story market really did not sell off no matter what economic data was.
3) The leading sector stocks such as IBM , INTC, WALLMART ( trading @ 52 weeks high ) and to day GOOGLE have been major catalysts for other smaller cooperates. These leaders can paint a strong picture of the future trend .
4)Financial write offs are NO NEWS to the market,,,
5)Bernanke stood behind the bulls and acted decisively during the dull days. He made a mess of it last year but compensated it in 2008
6) OIL RALLY did not push the market down ..
I think we have enough reasons to go LONG don't you ?
SWING TRADE FUNDAMENTALLY STRONG STOCKS AND USE YOUR KNOWLEDGE OF TA TO OPTIMISE YOUR PROFIT...
Grey1
Totally agree, one of my new rules will be to not post outside of TT for a while (4months). Too much of a distraction on what I'm trying to do here.
belflan
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Indeed, far too many "All you need to trade is a .......", "how I trade fx at huge leverage without stops", "stops are simple - all you need is a thingy ma jiggy candle formation", "free magic indicators" and similiar such threads. All reason suggests that so much of this stuff is both a waste of time and unverifiable, but it goes on and on.
Much of it is directed to those with very small fx accounts. IMHO it is very difficult to get anywhere from that position, no matter how smart and/or disciplined you are. While I can understand and have sympathy for that position, I really think that the discussion it generates is a waste of time.
firewalker99
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Hope nobody minds me having a say here... haven't really posted in this forum since a long time, and I only have a look now and then but it's true that a lot of bs is being posted in the public forums and it seems that only the private forums still have a decent quality number of posters. But I'll cut to the chase...
In all of this I find a common denominator. You seem to be looking for reasons to substantiate your bias towards the long side. I agree there have been some noteworthy positive signals but we should keep in mind that the news doesn't represent what's in the chart at the same time. Most of the time bad news will have already been digested in part before it comes out. Likewise with good news.
If I understand correctly you are taking an intermediate long position (3 months?)... but I think that's what you'll find out that the exhaust low in January was the time to do that (indeed for 3 months, an intermediate counter trend consolidation). Anyway, I could be wrong (obviously), but I think it's important to remember that although some news reports are better than expected, they are still worse than before.
Finally, it's good to see some at least some thinking is going on here. Might have to explore this forum a bit further
In all of this I find a common denominator. You seem to be looking for reasons to substantiate your bias towards the long side. I agree there have been some noteworthy positive signals but we should keep in mind that the news doesn't represent what's in the chart at the same time. Most of the time bad news will have already been digested in part before it comes out. Likewise with good news.
If I understand correctly you are taking an intermediate long position (3 months?)... but I think that's what you'll find out that the exhaust low in January was the time to do that (indeed for 3 months, an intermediate counter trend consolidation). Anyway, I could be wrong (obviously), but I think it's important to remember that although some news reports are better than expected, they are still worse than before.
Finally, it's good to see some at least some thinking is going on here. Might have to explore this forum a bit further
Grey1
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Hi
Thanks for your view,, Only some one with a crystal ball could have gone lONG in JAN and even if he had the ball the market still would have gone against him to to re test the LOW on 10th MARCH ,,
I needed more evidence both fundamentally as well as Technically to take a LONG position and for that I needed few more weeks to confirm . This is the confirmation principle we all trust in TA.
Not only I am long I also feel there is a MAJOR break out to above as soon as Daily and WEEKLY chart get OS... so there will be a struggle from here on ward to get to OS ( already OB ) with out market losing much momentum to upside but once we get there the break out will be massive.
I have already opened my portfolio . The rest is in the hand of the market .
Am I correct to say we had a double bottom and that is bullish on a daily chart ? ( not a fan of chart pattern )
Grey1
firewalker99
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Well... Not exactly. I'm not trading off a daily timeframe but the same principles as on an intraday chart apply to a chart of a bigger timeframe. For this purpose it doesn't matter.
When we moved lower a good 500 points in January on a single day, the downtrend was accelerating. This was accompagnied by ever increasing volume, ending into a panic exhaust move (capitulation). A long entry could be taken here on the day the market bounced an equal 500 points to close above the high from the previous day. I've drawn a red circle around these two days. I'm not saying I'm advocating this kind of entry, what one does with it is entirely up to his own preferences with regards to risk and patience. If this was an intraday chart I'm sure some traders would go long there. With the initial target resistance around 12800 (green line) and a first exit at "1".
You are right there was a re-test - there usually is - in March, but it didn't move below the lows of January. So anyone still holding some of his position would not be stopped out. Ofcourse at "2" the trader would have noticed that price failed to break higher again and should've exited his longs to wait and stand aside to see what happens next or go short again).
At "3" and "4" we had re-tests and this confirms a potential double bottom. Although a double bottom changes the trend and often means a trend reversal, if you look at a weekly chart it's easy to see this consolidation still hasn't broken a tentative trendline drawn from the highs in October last year (see second chart). In fact, notice how the last four days we are hugging that trendline but staying below it.
Also, "5" is a sign of weakness... if the market was really strong I would expect to see it stay above the cyan demandline.
True, but the longer one waits for confirmation, the higher the risk. We are already +1000 points above the lows.
I agree, IF there will a break-out it most likely will go accompanied with a decent energy release.
Anyway, I just wanted to illustrate that there are still technical signs that support the downside view
My compliments on taking a short position as early as September though, that was a very good call.
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Grey1
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Well... Not exactly. I'm not trading off a daily timeframe but the same principles as on an intraday chart apply to a chart of a bigger timeframe. For this purpose it doesn't matter.
When we moved lower a good 500 points in January on a single day, the downtrend was accelerating. This was accompagnied by ever increasing volume, ending into a panic exhaust move (capitulation). A long entry could be taken here on the day the market bounced an equal 500 points to close above the high from the previous day. I've drawn a red circle around these two days. I'm not saying I'm advocating this kind of entry, what one does with it is entirely up to his own preferences with regards to risk and patience. If this was an intraday chart I'm sure some traders would go long there. With the initial target resistance around 12800 (green line) and a first exit at "1".
You are right there was a re-test - there usually is - in March, but it didn't move below the lows of January. So anyone still holding some of his position would not be stopped out. Ofcourse at "2" the trader would have noticed that price failed to break higher again and should've exited his longs to wait and stand aside to see what happens next or go short again).
At "3" and "4" we had re-tests and this confirms a potential double bottom. Although a double bottom changes the trend and often means a trend reversal, if you look at a weekly chart it's easy to see this consolidation still hasn't broken a tentative trendline drawn from the highs in October last year (see second chart). In fact, notice how the last four days we are hugging that trendline but staying below it.
Also, "5" is a sign of weakness... if the market was really strong I would expect to see it stay above the cyan demandline.
True, but the longer one waits for confirmation, the higher the risk. We are already +1000 points above the lows.
I agree, IF there will a break-out it most likely will go accompanied with a decent energy release.
Anyway, I just wanted to illustrate that there are still technical signs that support the downside view
My compliments on taking a short position as early as September though, that was a very good call.
Hi
I think the case you are putting forward is rather weak and all after EVENT analysis, which basically means WE SEEN WHAT HAPPEND NOW LETS FIND A REASON FOR IT ,
NO ONE SHOULD HAVE GONE LONG IN JAN ,, That would have been NONE TECHNICAL and BOTTOM FISHING , I am not talking about intra day trading. I am talking about swing of 3 month which if we had taken the RISK in JAN still would have made NO MONEY by MARCH since the LOW was tested again ,, SO your JAN case is well out of window. It is no good to bring the time frame into it IT SIMPLY WENT TO TEST THE LOW in MARCH as simple as that .
Now lets look at My LONG case. I have no crystal ball ,, As a Technician I need some kind of evidence to confirm CHANGE of trend. It is my responsibility to assess risk against possible reward , the technical analysis must confirm fundamental analysis of the market for the next 3 month . I need to see a new and young trend to be born before I can go long . This is principle of confirmation .. If you don't use this principle you are guessing, I need to confirm it technically and and fundamentally ,,
Technically :--
We had re test of JAN in 10 th of march ( confirmation )
We have a nice up trend regression channel on LOWER time frame ( daily ) confirmed by a OS situation in monthly ,, This is Multi time frame analysis ( second confirmation )
Fundamentally:-
ALL above explained in the first post
I went long 17Th April with INDU @ 12563, I think this was an excellent ENRTY technically but a poor entry for a man with crystal ball . Remember I am LONG when there are still DOOM and GLOOM all over the market and you telling me why I did not go long IN JAN lol you kidding me.. In JAN we had blood bath , VIX was at its highest ( currently low) . There was a talk of market crash , Bernanke was in tears and you telling me I could have gone LONG IN JAN ,,, Full time traders understand where I come from .
You see my friend.. I think you have forgotten what we went through in JAN and in what manner Bernake stopped the market from crashing and you wanted me to go LONG then,, No more comment from me .
Grey1
firewalker99
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I'm not saying your long entry was necessarily a bad one. You could've already racked up 300 points. If you trade with a longer time horizon like 3 months from now, than you might be looking for something more than 300 points, but as far as I can tell the chart right NOW (this could quickly change if we break higher) does not confirm such a scenario.
The fact that VIX was at it highest adds another confirmation signal that going long there was the first entry. As I'm sure you know the VIX is a contrarian indicator...
Exactly... when sentiment is worst and consensus is at extremes, that's when reversals take place
PS: just for clarity I'm not saying anyone should be long since January. In my view - and of all this is just opinion - going long now is just way too late and I think we will turn lower soon. This isn't hindsight. The day after the +500 point plunge volume was extreme and we closed above the high from the previous day. All that could be seen in real-time.
firewalker99
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Don't mean to go on about this Grey1, my post is nothing more than an intermezzo
Anyway, to finish this short arc, I'm curious as to which signals would invalidate your long? You said you went long for 3 months, but I take it you have some elements in your mind that would make you close your position. Or will you just let the trade hit your stop in case it shouldn't turn higher?
Grey1
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I'm not saying your long entry was necessarily a bad one. You could've already racked up 300 points. If you trade with a longer time horizon like 3 months from now, than you might be looking for something more than 300 points, but as far as I can tell the chart right NOW (this could quickly change if we break higher) does not confirm such a scenario.
The fact that VIX was at it highest adds another confirmation signal that going long there was the first entry. As I'm sure you know the VIX is a contrarian indicator...
Exactly... when sentiment is worst and consensus is at extremes, that's when reversals take place
PS: just for clarity I'm not saying anyone should be long since January. In my view - and of all this is just opinion - going long now is just way too late and I think we will turn lower soon. This isn't hindsight. The day after the +500 point plunge volume was extreme and we closed above the high from the previous day. All that could be seen in real-time.
OK You are not using VIX correctly,, If you use VIX when it is at it is highest you are bottom fishing , You are guessing the bottom. People who say buy VIX when it is at its highest are taking immense risk ,, You need to let VIX to settle down ( IN TA is called BASING ),, you need to see a BASE or in my case a REGRESSION CHANNEL .
so to use the VIX correctly you need VIX to break down and on the down trend before you go LONG .
This is wednesday's VIX interpretation
http://www.trade2win.com/boards/pod...stock-option-prices-retreats-2-9-20-26-a.html
Just thought to explain this ,,
grey1
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