The frivolities of the last few posts beg to be redeemed by a chart. So I will share with you what is keeping me up late. (This is where you look at the chart. Oil is on top, and the NAZ is on the bottom, in case you are chart dyslexic. Sorry, I can't afford the CL subscription, so you will just have to make do with QM.) At about 10:30 AM PT, the NAZ ceased to give a shit about the price of oil. Of course I still gave a shit, and lost money shorting. Were the preceding correlations random? Is oil responding to the NAZ and not the other way around? Did CNN say that oil is dead? Or did my posts persuade the Street that Everyman is now watching oil and that it is time to fade? Any ratiocinations would be greatly appreciated.
no "ratiocinations" to offer but as soon as possibility of $80 a barrel hit the news I run to a nearest gas station and noted that the reg gas price still below $2, weird!
Generally the pros call this behavior a divergence. Who cares why it happened. The only thing that matters is how often it happens. Take your loss and move on to the next trade. Perhaps the behavior you've been trading is a divergence. Only time will tell.
If you've got the cat in a box, to save face, I would discourage looking. Simply, trust the cat is in there, probably dying to get out. Let the box define the cat's boundaries. As long as you know the cat is in the box (they raise quite a racket when confined against their will), you can measure the volume by multiplying the length X width X height. If you have a two-dimensional cat your problem is simplified by a third. Knowing the cat is in there should give you some piece of mind as should knowing the dimensions of the box, whether two- or three- dimensional.
Man, ET owes Jack. I wonder what % of message traffic over the last year is centered around that guy. What a legacy -- he's long gone and still being talked about. And look -- I'm extending the behavior right now!
Yup. Jack sent me on the wild goose chase of looking for a leading indicator. Now I have three of them, including oil, not a one of which is as good as a simple volume divergence. Can you believe that as of this writing my NAZDOIL chart has only been downloaded 14 times? I could post the Holy Grail and nobody would look at it. (As an aside, how do I know when to trade a divergence of a divergence? Can I trust a revergence, or must I wait for it to diverge again? I hate near 100% correlations that randomly switch sign.)
Well - if you can use the switch from divergence to convergence and vice versa as "when" to trade -- just develop some sort of against the box strategy using two accounts to get the direction.
I did something like that recently. I traded QM just for fun and had buy/sell buttons hot for both NQ and QM. QM started going up and consciously I meant to punch NQ short but I subconsciously punched QM long instead. Would two brains be OK instead of two accounts? I think it must be something like knowing when to transition from trend trading to range trading. I always get that wrong, too.
Nkhoi. You jest, but if you believe in Old Saint Jack we could have 80 buck oil in 2 and a half years. If that means $50 California champagne I am going to drink myself to death now while I can still afford it. Mike.
Now that we have Jack back, I hesitate to post a chart, but impulse overwhelms caution. The DUCK looks VERY sick to me. Could we call this a failure to fail to fail to traverse? I think I'm taking the wife out of it tomorrow.