Well I know exactly what they look like. I'm not kidding. All good pullbacks, in my world, look remarkably alike. Its almost like they follow a script. No minimum bars but I like at least a 2 point spread.
Most jumpy day I´ve seen so far, I thought the indexes were gone break straight down through support.
I dont think the bulls have lost control yet but its turning into a real fight. The bears have definitely gotten stronger. Ive been bearish for several months as I just cannot see the upside to this present economic picture but the market has continued to mock me until recently. Intraday it doesnt make any difference but these kind of days can unnerve people who arent ready for them. These are the kind of days Jack loves.
Personally I believe that the markets are efficiently inefficient. In any case it really doesn't matter - but I know you know that. We've been riding R for 2 years. We'll either break through on crazy volume or we'll pullback. Either way 2006 should be pretty trendy compared to previous years. J
Soooooo...... This all means that the R is the top of a FTP and the trendline for LT is coming into view from below. This is a point in time where the wiggle room is being cut to a smaller and smaller range. Getting across to the other side of the LT (going R to L) is what has to happen over the IT (intermediate term). Lets just say that it is possible for the LT to come to an end, as well. If that is on the table (It has been for me), then we all should be able to go back and look at the current annotated graph and see a lot of evidence. One drill that you can do that is very important is to do the rally attempt analysis of WJO. This fits into his IT type analysis. From a logical and reasoning viewpoint, we are looking for the rally attempt analysis to FAIL (and do this repeatedly) as an indication that the LT (BULL) is capute. This drill was repeated four times before the last collapse. It is a repeated failure as the testing continues regarding the R. It happens in the FTP that ends the LT. As everyone takes into account the news etc., it is always possible to use TA to take the measure. Rally attempt analysis as a tool can get quite dusty from not being out on the workbench all the time. But it can be used repeatedly to deal with ends of LT trends.
The "M" chapter of O'Neil's HTMMIS is a good one and is worthwhile to read in its entirety. I still have the first edition on my shelf that I got with my subscription to Investor's Daily (now called Investor's Business Daily) when I was in college. Back then I clipped out the charts from ID and had a little collection of the ones I thought were forming a "cup and handle". I "traded" stocks using the phone and watching the delayed ticker tape going across my TV on the UHF channel, KWHY channel 22 in Los Angeles. I had a $2000 account and could barely make a round lot on most stocks; the commission was about 100 bucks each way. I think I lost about half my account before I took out the money to make a down payment on a car, and I lost interest in the market for about 8 years, during which time I finished my formal schooling. When I started working full-time I took my $10,000 starting bonus and opened an account with TD Waterhouse across the street from the firm, and the commission was about 15 bucks a trade and I got real-time quotes right at my desk for free. I think I had a dream about having a setup like that when I first started in college. I laugh now when I think about having to hit "refresh" to get an updated quote. Anyway, O'Neil came out with a newer version of his book in Q&A format which I thought was more accessible to the neophyte, 24 Essential Lessons . . . is the title I believe. I can't remember, though, if he includes the "common mistakes" people make section in the back of the new version. That chapter is also worth a read. It's geared toward stock investors but I took what was applicable to trading futures and started my own list. ET is a super place to find additions to the list because of the curious fondness that non-operational people have for giving "advice" to others and playing out their recurring drama for others to witness. The journals forum especially shows how some of them keep screwing themselves further. The initial amusement of witnessing their display wears out fast and after awhile it really is not a pretty sight. I think I read somewhere Jack saying something to the effect that a person learning to trade gets only one chance at a beginning and how a person can forever lose the opportunity to reach an operational level if he screws himself long enough. I like to believe that a person always has the opportunity in life to redeem himself no matter the depths he has sunk to. But in regards to trading, ET has changed my mind on that.
I really tried to understand that chapter and specifically the rally attempt analysis. I unfortunately did not put it together and ended up giving the book to my doorman. Is their anything you could advise to help a neophyte in putting the rally attempt analysis together? I will pick up a new book tomorrow.