For the time being, the bull is back due to bear flag breakdown failure. Price is now back in the bear flag pennant, with one minor change, price left a fake breakdown at the bottom, the backtest did not hold as resistance. As long as the white line (support line of pennant) holds the trend will continue up. Hop'in inside the pennant invalidated the backtest created yesterday, technical failure at the resistance level, hence the upside bias today, eventhough a great part of it was achieved during the overnight session due to the tremendous AAPL report. Bullish bias as long as white line holds. The bear flag is now morphing into a potential upslanted inverse head and shoulders, look out for a test of that white line as right shoulder creation since right now the formation is incomplete. Failure of such shoulder, take us back down and possibly in full force, something I will not predict unless it occurs.
First serious resistance or target of the day for longs is here. The backtest of the old broken Uptrend Line, flipping this and regaining support on that uptrendline would be incredibly bullish for the market. Not something you want to predict unless it occurs, gotta watch the PA, one day at a time, ever changing market, now global markets, nothing is secluded to the US itself anymore, one day at a time.
Nice read "Xspurt" Dow about to make new highs, guess this time the "As I said" cannot be used. Bottomline is the story remains the same, price is unpredictable, best we can do is follow it.
Hi Freak, After I posted the following you thought I was saying both up and down.... ================================================ "In a nutshell, the monthly and weekly charts across the indices are a bit out of sync. and that makes things messy - choppy. But choppy on that timeframe can be delicious in the lower TF's. To make this bear move work out we need to resolve some major cycle conflicts. The weekly is setting up a very strong push up against the monthly which is attempting to form a bear top. To kill off this weekly up move we need potent downside action and if that is not happening then we will once again be counter to a big up move. Before this last swing top I said I was expecting a complex move before the real move and all the more so in an election year and with Central Bank interventions. If we have a weekly swing up that would set up that complexity. ACTION The next 6 trading days could be very interesting. Either we have a strong daily push down to swamp the weekly cycle and roll it over making the monthly the boss down, or we are counter for a strong weekly cycle up against the monthly turning it positive. It looks to be all in the strength of the move and if we break 12700. At the end of the week we will see better how the monthly chart reads." ================================================ You read that as saying both up or down rather than if 12,700 is taken out we are in Wave 3 down and if it holds or we fail to get strong down side action then the weekly charts will drive us up in a strong move." So specially for you I attempted to clarify with the following (and I am trying to help you understand by directing the focus of your attention to where it counts by these excerpts). Remember the key was to be the way the down action developed: we got a strong early one day down move that reversed like it hit an electric fence causing the daily candle to have a big tail underneath. This lack of power in the down move is the predicted warning that the daily bears are about to get swallowed by the weekly bulls. This simple key in reading the lack of power down and in fact the sharp intraday reversal gave the expectancy for the big swing UP... But I understand that when many are presented with a conflict like this they wait for the outcome. Even when I post the equivalent level on the SPX to the 12,700 Dow level it won't register. The reality is that it depends on what tools and skill level a trader has that decides when that outcome is clear. For some it will be minutes from the low while for others it will be days or even weeks from the reversal point. I could go on but the eyes are blind and the ears are deaf.
Some questions..... When you're trading the indexes intraday, are you only watching the chart of the instrument you're trading? Or do you also watch charts of other indexes? Also, how many time frames are you watching? How many trades a day do you have? Do you have some days with no trades at all? The reason I ask is because after a run of success I really fell down the rabbit hole this past week. I thought I was doing well and then..... BAM! Information overload and analysis paralysis sets in. I'd like to get a better idea how you guys approach this. I see charts of the S&P, Dow, Nasdaq, FTSE.... that's a lot of information right there. Then you've got various intraday timeframes as well as day session-only and 24-hr variants of each of those. How do you keep track off all that intraday?? Since some of you are into mentoring, what do you tell your students when they have this problem?
Well, forget the question about how many trades a day... obviously that varies greatly depending on the trader and his/her plan. I'm just trying to figure out where it all went wrong this week. I couldn't get any good reads on the market, my intraday charts were messy and cluttered, lines everywhere...
That's kind of like asking me why you crashed your car - without a lot more information I'm guessing. Sounds like you are trying a new workspace with lots of charts and trying new time frames with perhaps new TL or S&R approaches. I don't know anyone who tried that and didn't get fried as your brain can't absorb and process all that new information. Earlier you asked if anyone would use TL's you posted. I said remember to use your swings. I had a student with lines everywhere and he didn't know which were weak or strong or how to trade them. As soon as we went back to the rules of TL placement and the order of major to minor drawing it became obvious. Rules and Order of progression are lacking hence your question. Only after understanding this can you get clever. If you jump in too deep too fast you drown in TA possibilities. There are successful traders that don't use a TL whereas other wouldn't want to trade without them. It is a skill to learn, the help is here and Cornix has hundreds of examples and RedTank showing his approach but it takes time. Looking at other related charts is a big help whether it is sector analysis or indices. Taking the Dow in isolation meant the bounce on the S&P that corresponded to the Dow 12700 level made the Dow reversal easy to spot. Without that cross reference the importance of the Dow reversal was missed. Dealing with lots of charts and TF's, again it's all about Rules & Order. You work big to small and as soon as as you have mental overload it is time to back off regarding the number of TF's and markets you look at. All I look for is the major S&R's and TL's on the big TF's and then you can drill down to where the action is. Lots of trader only use 3 charts. It will limit their trading to some degree but the question is not quantity, it about the quality of information you can extract from a chart. It sounds like you are in a state of confusion and resolving that is part of the growing pains or you remain on the level you are on. Now if you disregard everything I have said, you still should be able to open a single chart and take a keyhole view of the market and trade if pretty well. If you can't then everything you add reduces your ability to trade rather than helps you to catch the move. You add charts because you have extracted every piece of information that is on that "keyhole" chart. Attached is a trade set up that I was teaching to a new student in real time on the 3m chart. There were lots of prior long and short scalps and then this set up. You don't need anything else to take the trade but the additional information helps. S&P reversed on critical support and the bulls hit the market. My prediction was that the weekly bulls would take the market up hard if this level was not broken so the reaction at a pop or drop level was a gift. I hope you get some direction form this.
Well, I have started to add more charts to the mix. The reason for this is during my daily market reviews I had noticed that some trades that reversed on me had hit a resistance level on another index. So I figured I should start watching more stuff.... and the result was a lot of confusion. The other problem I have is getting caught up in minutia, and the channels within channels. Here's a chart that shows how I see the S&P. I looked short after the cash open and the upper left chart shows a clean and easy ride down to the red channel lower limit, then a nice reversal up. But the chart on the upper right has an even smaller channel that was in play, and I will at times get hung up on smaller structures like that and exit trades prematurely. I'll have short term lines drawn and they'll mess me up sometimes, but I had been coming out profitable at the end of the week despite that. But then when I add the Dow into the mix... wow... it's like my brain short-circuits.
Dv, The most important chart for me is the daily chart, even if I'm daytrading. It has the S/Rs where price has a higher chance of respecting plus helps me determine how greedy I can get with my winners. Speaking of winners our greatest power over the markets is our flexibility to cut losses short and let winners run, that is one sole reason as to why a chance exists for a retail trader to make it in this business. I also use the 15min chart, if that one cant encompass all the most recent formations, I might switch it with the 60min for the time begin but the daily is King, in my book. Ocassionally I look at the weekly and monthly to determine potential areas where the trend could pause or turn. Not a big fan of 5min/1min charts, eventhough they can offer low risk high reward plays they are also the ones with the highest potential of chop, it's a tradeoff when you go to fast timeframes. I used to trade low timeframes, not anymore, Ive gotten lazy and the less time I spend on the computer the better. Just a matter of style and preference. Xspurt suggestion seems to be in line with what I would suggest 3 charts per instrument.