Al C., thanks for posting charts showing the patterns in action. That should be helpful to many seeking to understand the geometry in the market. I was wondering if you also looked at daily time frames too on the major indices. This is what I see so far: The S&P cash is currently transitioning out of a bullish gartley with completion at 788 to a 'bat' formation. (with 935 as starting point, 806 to 852.9 to 788.9 and now the final leg being put in place) There is confluence at the 879-892 zone with fib levels and the 200ma that's acting as a magnet and wall of resistance. I wouldn't be surprised if it stalls out in the zone. Zbear, do you see the bat? Mav.
Maverick, The formation you're describing isn't a Gartley or "bat" (frog, wombat, tree or any other ridiculous Scott Carney pattern). If anything, it's a .618 retracement of the 935 to 788 leg. With all trends pointing up I wouldn't look to be short just yet. There will definitely be resistance at the 880 level but that's all you can count on from this chart right now --opm8.
Mav and opm, Really appreciate your contributions here. It shows that we can really have an intelligent thread on a meaningful subject. This is what is so wonderful about these patterns. When fully understood they really are predictive and tell the whole story. Let me clarify a few things first then we will look at the chart I posted with this. First we cannot get hung up on the pattern "names". It seems that the REAL originator of the pattern names has had some or all of his work "lifted" by some of those who have read his books and taken his courses. That someone is Larry Pesavento, who has the utmost respect of the trading professional community. He gave the patterns the names. In order to profit on his work others have followed (some who were his students) and in order to impress or avoid copyright problems they played with the names and added some "improvements". I could prove to you that these are not improvements and that it actually hinders learning about these patterns and method of trading them. Why learn from the "knock-off" when the true Master is still amongst us? He is alive and well in Tucson, Arizona. He manages and supervises the trading of two large hedge funds. He has 40 years experience in all the facets of this business. He teaches, but unlike many teachers he trades daily for others and his own account. I sat next to him and watched him trade -- it was awesome. He is relaxed and makes amazing trades -- all pattern based. Now I have not mentioned him before in this thread by name because I did not want it to sound like I was pushing his books or courses. And I won't do that now. I mention it strictly to clarify some previous posts made by others. Yes, the names do help -- because they help to "label" the patterns for communication purposes. All the patterns have definite rules or conditions of price, time and ratios to make them valid patterns. This is necessary for we are trading money with them and we want patterns that WORK -- that produce profit 70% of the time! Now lets look at the chart posted with this. The blue lines are "connecting the dots" -- the "significant" highs and lows and show the retracements form previous swings or "legs". Now in the green pattern (Butterfly Bottom) you can see confluence of ratios (blue lines) and the smaller pattern combined with the larger one (Bull Gartley - gray lines). This is beautiful and you can see it produced Substantial Profits! Which again proves that the patterns WORK. This is real stuff here. Not something I chose to use by way of a demonstration -- it was you guys that made the first reference to the timeframe and date. Now what I am trying to show here is that you both were on the right track and I shall be happy to continue the learning process. By the way if you did go to Larry Pesavento's site which is http://www.tradingtutor.com you would see that he has been kind enough to give me a link on his site. I was honored that he thought I was worthy of such a mention (BTW -- not paid for by me and no benefit to Larry). My link is the one called "Realtime Trading Calls". Now don't get me wrong here, and start thinking evil thoughts -- I am not soliciting any business for me or Larry. I really am posting here to be honestly helpful. No other motives. Trading and Larry have literally "changed my life" and any little thing that I may do to repay my "good fortune" is what I am trying to do. If you need more help -- just ask. Post here or PM me and I will answer. Thanks again for your posts, Al
Maverick Looking at the S&P Daily Futures here........As you see,,, Today's (20Mar) High, was .618 retracement from Jan 13th Hi, to March 13th Lo It was Also a 1.382 expansion from the Feb 18th High to the March 13th Low. Also,,, Mar 13th Low was a 1.382 expansion from the Feb 14th Lo, to Feb 19th Hi Larry Pesavento would probably make a point here,....which is a key.... "The "Sacred Ratios" are Present....... ( Larry's terminology - and I like it ). "Other Patterns" are present, ie.,,,A very pretty "Declining Wedge", Top Line a....starting with the high of JAN 14th...........b.... Touching the Hi of 03 MAR Bottom Line a...Lo beginning on 11 NOV 2002.........b. Touching the Lo of 13FEB ...and...12MAR So on 14 MAR we had a beautiful Doji form up right on the upper line eh ? ... Very Pretty. BAM......Real Power comin' up from that 1.382 expansion to blow out the top of that wedge. CLASSIC... Classical "Wedge Analysis" says that we still have a way to go ( up ) before it meets it's price target ( about 950 ). But Today was a "Doji" which often indicates a "short term" trend change, and don't forget that it's at that 1.382 expansion point. Often after a run like this it will pull back down to the upper line of the wedge, then off she goes again. Candles are good because the "Four" reference points are so easy to see. Sometimes I'll run my Fib # and Lines from the Hi/Lo,,, or/and sometimes from the Open/Close. My longer bias is that it will go up, But I am favoring a short pullback of some sort. There's more.....but I'm a bit distracted by the War right now....... 1st Marines are my Boy's.....and I take it damn personally. Anyway,,,,,,,, Just trying to give an idea of how ..."I look at things"..... here. ALL Patterns Work,,,,,,,,,Except when they Don't .......Ha. Probabilities are all we have ........and maybe a little MoJo if we be lucky eh ?
It would be imprudent to give Scott Carney a short shift, if one has not read his book ........Eh ??? His book is Extremely Lucid. He gives Valuable insights into the subtleties of patterns, that I've not come across elsewhere. I have read the book - it is good. It takes Nothing away from Larry's work - I have read his books. Carney was a student of Larry's and admits it. Just as Joe DiNapoli was a student of Larry's. ALL of their books are good, and ALL have something valuable to contribute. 1st Marines Rule...........Semper Fi...............
ZBEAR, Regarding your post to Maverick about other patterns, it seems obvious that you are well versed in chart patterns. Also, as you likely already realize, when you add key Fib. ratios to those patterns, they take on even meaning as to what MAY be happening in the market. This does not even begin to mention how harmonic numbers can also play a part in market analysis. I liked your post thanks, Al
ZBEAR, Thanks. Please note that in my post I did not mean to impute Mr. Carney's reputation. I did not use his name in my post. I was referring to the general use of years of work by originator's of quality ideas without the providing of proper deference to the originator. I apologize to you and Mr. Carney if I in any way offended either of you. I shall forthwith obtain Mr. Carney's book and review his website. Then I shall be in a position to comment without any malice. I too have read many books on trading and found some to be an actual misuse of the original works. Often any alterations or additions to a carefully planned system can actually ruin the system's effectiveness. I know you would agree with that, Zbear, and am sure you have seen that happen. Enough said for now. And again I apologize -- no offense to you or Mr. Carney. Thanks, Al
Thanks Papst. I appreciate the nice compliment and hope that I shall be able to live up to your kind words. I have a lot more to post regarding this thread and will soon offer real time posts and charts. Thanks once again , Al