The FED has said Jawboning is worth 1/4 to 1/2% rate decrease by their own admission. They also said low rates until 2013 which means double dip. The market will do what the market will do but that's the deal. I like your charts
While the bull phase was probably the easiest thing ever to trade because the system was being pumped, we are now back to real market trading and it won't take much to scare traders into a panic. So many were calling tops when it was a bull ATM and bears are much harder to trade so there will be a lot of corpses soon. Looking inside the daily to see what volume shows on the 4 hr charts tells me that this is a true smart money test. While the weekly level that I had drawn months back is holding, it is a minor support so close attention needs to be paid to the action here. The daily big view is a very sick market at a critical support and something needs to be pulled out of the hat to get some positive upside action. There is a genuine Smart Money volume test going on here looking to see if it is safe to weigh in. So far it looks good but it is not finished and the backdrop is hellishly bad. In other words, make or break. This pattern tends to have a Happy Days fake pull back before the hangman's trap door is opened and this is what I think is being attempted here. It is set up with a strong PA buy signal ready to be triggered but keep the power dry until it is pulled in case the trap door opens. So if it's not clear, I have gone from a happy bull to a happy bear but I am comfortable trading longs inside a bear move when the trigger of the signal is pulled.
XSpurt, Do you ever drill down below 5m and look at 1m charts, or do you find it too noisy? Or are you a primarily longer term trader?
We are setting up for a downside spike IMHO. Obama and the FED are cooking but.... I'm with oyu in so far as we had a couple big pushes up with volume but today was almost all selling all day again. We'll see if the bottom is in soon. The reason we rallied yesterday---very oversold---FED--two more years of QE in the form of low interest and a small short squeeze covering fuel. What do we have now? Main street is gone. Cash levels in mutual funds are low. FEDS hands are somewhat tied besides what is it really gonna do "In the moment." Our only hope is July's econ numbers to show the world isn't really ending. That's a week away.
Yup. Certainly need to pull the rabbit out of the hat now. The test is not finished but it is in the negative phase. I have often seen a big reversal at this point but with gold heading to the moon it's clear where confidence lies. However, when this move is finished 6000 will seem like a rich man's dream imo. A critical day ahead
I do as well (1m), but find it sometimes obscures my "big picture" view -- do you use a daily and hourly perspective and then time trades based on the 1m? (when you say below, you mean a tick-based chart?)
I start with the big picture and work down to one time frame below what I trade. That way you are not taken out by something obvious elsewhere. My big picture starts with quarterly charts. 10 seconds is my fast chart.
Just to clarify, when I am writing about tests, failures and retests, these are not PA signals but rather volume signals. I want to know what the smart money is doing as they seldom jump in against a big trend. They want to test the selling strength before they to go long. That's what is going on at the moment and it is the same as what happened at the prior major turning points. It means you can read more into the strength of a set up and it's likely durability rather than just reading a PA signal. In fact when you are waiting for the PA signal to trigger there is a wealth of information being spilled on who is looking to play the trade - the strong hands or the weak hands. Strong hands are testing now for a long when the market is full of fear.