Dragon pattern

Quote from athlonmank8:

Well the truth finally comes out
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Thank you for taking me seriously. Since I like to share good ideas, I have a very nice bridge for sale for you. It is rather new, with a discounted price and I accept monthly payments for it. Are you interested? Also a slightly used sarcasm detector could be beneficial for you.

Why would it matter what I do with the pattern? Not to mention this is the internet so I can say anything, you can't really check it.

What matters is, what YOU the reader does with it. As long as you are just wondering about it or dismissing it out of hand because you don't recognize value, then it doesn't matter if I post charts or not. But maybe, just maybe there are 1-2 posters here who actually can learn it and make profitable decissions based on it and those are the ones for whom I keep posting these charts.

Apparently you are not one of those few. Don't worry, no harm done, just move on, nothing interesting here for you. Chop-chop, go now. :)
 
You're riding a tricycle when they're guys ot there driving ferrari's. This honestly looks like bottom of the food chain right now. This might be good, I never said it wasn't. How do you enter the stock? Early and anticipate the break, or after the breakout? the reason you're receiving criticism is because it looks like you're cherry picking these without analyzing risk and reward.
 
Quote from athlonmank8:

How do you enter the stock? Early and anticipate the break, or after the breakout?
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On Friday I actually caught it right on time. The ES was just hitting 1298, which was the exact level of the possible Failure. If you read this thread, Failure happens at the 2nd top minus half of the Height. Since the 2nd top was around 1305 and the Height was 13 or so pts, 1305-(13/2)=1298ish was the expected Failure.

Now if you thought the Failure would occur, you could have just gone long there with a 2-3 pts stop loss. I posted the pattern when the ES bounced a little already to 1300, (a little confirmation that we had a Failure at hand) so that was still good to go long, as long as you put the stop loss below the Failure. Since the expected move was 13 pts, a 3 pts stop loss would have given still a nice 3 to 11 (13-2 pts already moved) pts risk reward at that point, which is good.

I already explained how to play the pattern and I think it is rather obvious. When you see a doubletop, you short it and you do the math where a Failure could occur, and at that point you switch to long. When we get close to the expected 3rd top, you switch to short again.

About next week I don't really have a long term view, except I expect to reach (or get close to) the 3rd top, probably just after the open on Monday.
If and when we do, again, the size of the drop is NOT predicted by the pattern. It could be 3-5 pts, or 20-30.

A week ago last time we had a nice dragon the market melted down and dropped 30 pts...The chart is in the ES Journal...

Here is the repost from 1/27th:

Quote from Pekelo:

For the visual type:

9t0ec1.png


Nice buy in opportunity after the 8:30 drop.... Some of you Hawkeyes can notice that I cheated a bit with the 2nd top....

Edit: NDX was nicely corresponding with this making a doubletop, but with an RSI divergence. So may be not much more upside left in this....
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Now we only got 20 pts out of thre predicted 25 pts upmove (3rd top came at 1303) , but I think that is still pretty good, specially that the downward pressure was pretty high...NDX didn't even go positive on that Monday...
 
I'm looking at more upside for Monday and then a drop. Surprisingly spot on with your analysis. I'm curious if we're going to be right.

Thanks for the explanation. You answered the questions I was looking for.
 
Quote from Pekelo:

3-4 pts left to the expected 3rd top, I expect it to reach it by Monday 10 am, and that is usually a good shorting opportunity/time...
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Except the market blew past your top call to short at 1315 because the pattern was an Inverted Head and Shoulders that projected to ~1321 cash and not some fictional pattern you made up




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Today we had 2 of them a small one and a big one. Here is the small on a futures chart:

35d15df.png


It looks a lot like a triple bottom (there was RSI divergence too), because a dragon basicly IS a triple bottom where the 3rd bottom is a bit lower... height was 9 ticks and the 3rd bottom came in 8 tick from Failure.

Here is the big one:

242v6ep.png


I draw the lines from the SMA, although the real Failre happened 1.5 point lower, but the math was done from the theoretical Failure point. Nice bounce it gave...
 
Quote from volente_00:

Except the market blew past your top call to short at 1315
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First, I have to apologize for the late answer, because I have just removed you from my Ignore, so I didn't see this post earlier. :p

Now thanks for bringing this up, because I addressed this in the ES Journal, not here. The pattern played out before the market opened on Monday, thus you can not see it on the cash chart.

By 5 am on Monday, the futures topped at 1314 (if I recall) overshoting the target (in ES) by 2 pts or so. But from there there was a nice 3+ pts drop (shortable 3rd top) and that's how the pattern ended. I did mention that we might repeat the same action in RTH, but we didn't.

Nevertheless what we learnt here is that the dragon doesn't sleep, and the pattern can continue and finish in AH....

Here is the post from Monday morning:

Quote from Pekelo:

Sunday overnight action: Futures ran up to 1313.5 (5 am) and dropped from there 3+ pts. So we overshot the 3rd top target by a few points but we already had a decent drop, so technically the pattern is over.

It remains to be seen if it gets repeated during RTH....
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Quote from volente_00:

some fictional pattern you made up
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Not made up, RECOGNIZED or DISCOVERED. Slight difference.

By the way different patterns can and do overlap all of the time, so if you wanna get credit for that H&S, here is a pat on your shoulder. :)

P.S.: 2 years of constant repetition of the pattern as evidenced in this thread STILL hasn't convinced you??? Laughable....
 
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