QQQ is showing a small hinge getting formed. The price is neither dropping nor rising and the resolution of this (potential) hinge might give a clue as to the direction. Price is hovering closer to the top and price hasn't gone down to test the last swing low around 78. This shows that supply hasn't be able to overwhelm demand to take price lower. Notice the higher volume indicating higher intensity of trading and yet price didn't continue going down. It's like the supply gave up after a bit of a fight and not price is drifting sideways. I would consider it a bit of a sign of strength and with the hinge in the making wait to see which way price moves. Even if one doesn't pay attention to the possible hinge, the other thing to note is the price drop hasn't been more than 50%. It's actually quite a bit of a steady consolidation instead of anything resembling a drop or even a normal rest after some rise. Price is staying closer to the swing high area and is avoiding the swing low which might be another sign of underlying strength. Having the so called hinge makes it a bit easier for us to play and deal with price but even without it a person can easily see this behaviour and notice these little tidbits of information. Comparing that to my previous call to get cautious, this is showing that the call for caution didn't pan out. Price didn't continue down as it would have, had the hypothesis regarding the weakness were correct. In the absence of that weakness we again look at sideways and up movement. Hinge (red triangle) is our focus for now to see which way the price moves as a result of the interplay between supply and demand. If anyone of you are beginning to feel nauseated from this constant changes of weakness, to neutral, to strength, let me assure you the feeling lasts only as long as it takes price to resume a trend. This feeling is still better than the feeling of losing money in the investments without knowing what's really going on. Those with less inclination to be bothered with all this can always wait for the price go above the swing high or to go below the swing high. No worrying about the messy middle stuff that at times I write about. Simplicity is the key here. For Q's the price going above 80 or below 78 would be the example of that relaxed trading. QQQ Daily: Gringo
Price has broken out of the hinge to the downside. Price is slamming the potential support which is also the last swing low. Hinge play is tricky and price at times fakes a break out and turns the other way. For now price is clearly hitting the swing lows and we'll have to see how much courage demand hand here to keep the supply at bay. If price break down from here and doesn't recover from here we'll have to become cautious about longs if anyone's already in them. In case price just stays within the swing long boundaries or about, it could turn into a normal trading range and the hinge could just be obviated. As I was writing this price has started to break below the swing low. It's getting interesting at last. Stay alert and only follow the price. It could after a brief incursion go back above 78. But we don't know. All we know for now is that supply is in charge and demand is on the run. Gringo
I wouldn't say demand is on the run. Given the low volume, more likely it just isn't interested. We'll see how it looks by the end of the day.
When price moves up or down, it's called price action. There are traders who make decisions based on that price action without resorting to exotic moving averages and indicators. These elite traders belong to the coolest of the cools for this rarest of the rare ability. There are rumors that the ancient Greek gods had this phenomenal ability to read price, which game them immense power over other mere mortals. But, then again, I don't believe in rumors. Welcome! Gringo
Silver has dropped down quite strongly after a show of strength two days ago. This behaviour has been quite baffling and unsettling if one's been trading. This actually has been my fault in not properly asking the appropriate questions. These basic questions form the foundation of price action trading. Using the recent price action I was able to draw a trend channel a bit more conclusively. Having that channel clears are lot of the fog that's been making it difficult to pick a proper direction for silver. I hope clarity and profitability will return in due course. I strive to learn from my mistakes and having commented here earlier I am forced to now correct the mistakes. Let me be clear here that the mistake isn't that one is forced to exit within a day or so of entering. The mistake is to not properly have answered the below questions in advance. No matter how much one tries, there are going to be errors and mistakes. What I am striving for is reducing the frequency of these errors. So first of all I'll reiterate the basic questions that need to be asked and then the subsequent answers as far as my understanding goes. 1. What's the current trend of the market. 2. Where we are in relation to the current trend. 3. What's the most appropriate time to enter and initiate a position. 4. Manage the trade by monitoring the buying and selling pressures and making appropriate decisions based on which side has the upper hand. Now that we have the proper questions in place we go to the chart to see the possible answers. Gringo
Gold breached the supply line and the downward sloping trend line. This shows there's some kind of a possibility of something exciting happening or not. Price has gone up and started to retrace. If a rise comes here then getting in on the long side wouldn't be too bad. If the retracement continues in one form or the other and price continues to go down we'll keep tracking the downward move and hop in when and if the retracement ends. Now here conditions might change and if that happens we keep our mind open to the possibility of a continuation of a move downwards. We have answered the three questions. 1. Current trend. 2. Our place in the trend. 3. What's the best place to enter. Silver is more or less similar in action but gold has cleaner signals. Silver on the other hand moves a bit faster. Gringo
Q's are approaching the upper channel. The fact that price is approaching or even if it crosses the channel doesn't mean an imminent drop. It does mean however, to stay alert to changing conditions, and not overly pushing for long positions. Bigger view of what has happened in the last two bull and bear cycles. Looking at it one wonders why some people couldn't make money in the past half decade as the price is just heading up. Buy and holders if they were in at the bottom must be in heaven. Those who move with the price really don't care as much as they adapt to whichever way price is moving. The down moves have been somewhat muted as can be seen by the upward sloping trend channel. Does a bull market ever end? What about government buying up assets? Does that mean there will always be an upward sloping bull market? Realistically speaking I don't know. What I do know is price is moving up and so far there haven't been much signs of a sell off. So the direction is up but approaching the overbought area. Some provisions can be made to stay alert to the possibility of some profit taking if a reversal comes. Exciting times! Gringo
Now a closer look at QQQ daily. Price is heading straight up. Our friendly neighbourhood demand line is standing there on guard. Gringo
Gold is showing strength here. After retracing a bit it has pushed higher. The supply wasn't strong enough to do much and demand has overwhelmed supply once again. So now that demand is coming out of hiding those sitting on cash may do the same. Gringo