Comments from yesterday…. “I saw the resistance and the iceberg orders, but I didn’t make the trade…” Some people bought puts early in the decline... I saw one guy play the SPX 5170 Put from 2.5 to 10 I saw another one play the SPX 5240 Put from 1.55 to 4.75. Interesting points on this one… a. This guy saw it and took it earlier than the guy who played the 5170 b. The 5240 Put went > $93, so he left most of it on the table Bottom Line… could have been caught to one degree or another by any player So why this post? Could have been caught with Price TA. (No, I didn’t. I was watching for that shelf of resistance at ~ 18630 and thinking it might give a double top with the ES @ 5230… but neither of those happened. Like most others, I was caught off guard by the drop... and it was moving so fast I was concerned about chasing it down and getting trapped.) So, how could the top have been caught with Price TA? Recall the basic premise of Price TA… “Buy Support, Sell Resistance, etc”? Note the arrow on the declining tops line of the NQ? That’s resistance! (Similar to the declining tops line in the ES last August, btw.) FWIW...
Oh no!!! Not that Scat TA again! You failed to publish your analysis 2 days ago. Anyway good hindsight analysis. Next hindsight Scat TA analysis please
you would not have drawn the line until the 3rd top was formed and the market was already plunging so would have still missed it...
Charts, while unquestionably useful, are loaded with opportunities to exercise some hindsight bias and narrative fallacies.
It is obvious that he drew the down sloping trendline after the fact. Everyone can identify with precision tops and bottoms that happened the day before or in the past. As far as I know, traders trade the right edge of the chart while (most) mentors “trade” the left side of the chart. Subtle difference, but that’s what separates fake traders from the genuine ones.
You don't get it. I didn't know it was going to develop the way it did... but it was something to WATCH FOR. Hell, I wasn't even watching for it. But looking back I could and should have been. Nevertheless, it occurred and is fact. Price TA isn't about "predicting"... it's about "recognizing and reacting".
When I drew the line isn't relative. That the line held is a FACT. I'm not going to alert on every possible line or setup. I mention these things so that those who want to trade Price TA will know what to look for and maybe get it next time.
The point is the upward wedge forming before that plunge was a better TA signal to go short once it crossed the rising trendline and you still could have caught a large piece of downside. The line you drew was not as obvious leading into it but the rising wedge was clearly forming.
Where/what was the self-proclaimed "TA expert" analysis for the 400 point rise leading to the drop? Where/what was the self proclaimed TA expert analysis for the 300 point range that took before that? Or the 700 point rise before that? One day, one run, does not make a trader an expert.