Analyze this correlation divergence, please contribute.

Discussion in 'Technical Analysis' started by Cy_M, Sep 9, 2007.

  1. Cy_M


    Last Thursday, was a typical 7x difficult day that in my case was also further complicated by wanting to make a quick buc$1K and leave for a party, considering I am many hours ahead of ET. As usual, the problems never occur 1 at a time but rather they all come together to greet one.
    Based on my prediction at the time, I was expecting a sell off while ignorant of the upcoming job report and hence my Bias was South, at the time when the Job report insiders were pushing the market North and selling into the rallies which, explains the initial fall, to convince the crowd into becoming bearish then a short sharp rally to show a reversal and convert all into bulls, then a mini failed H&SHLDR and then sell all they can into a strong rally which wouldn't go anywhere but very mildly up!

    Well, thus this became a very difficult day for me and I guess for most. Due my wanting to rush I ended up losing a lot, refusing to leave my short positions and then the turn around was not enough to respond to my needs in a quick fashion but it did finally provide the opportunity to finish the day short at the top of the market which paid off the next day and missed the party damn it.

    When the market runs without manipulation and specially there exists good volatility, we all make good money, it's days like the one below, when there is full manipulations by the insiders and full of fake heads that we mostly get into problems and give back the gains. Not, only they manipulate the markets but the very same abuse strongly manipulates our psychological systems and makes it many times worse for us to their benefits.
    So let us review the difficult day since we all almost already make money on the easy days.

    The charts below represent the price action and my signals whereby the Blue triangles are buy signals and the reds are sell. As usual not every sell signal is a sell and the contrary will be true as noted below, thus I have the 3 other filtering charts to distinguish amongst the fake and the true signals.
    Please study, the charts below and suggest any potential correlations noted in the filtering charts that could have helped avoiding the fake signals.

    We all can come up with dozens of filters and they can all be correct utilizing any or many of the existing thousands of indicators, the success will exclusively depend upon the ability to filter out the false signals and that ability exclusively is contained within the ability of correlation or divergence recognition amongst the filters and the price action, hence this will be a general exercise of use to ALL.

    Please participate and contribute generously.