ES Journal - 2013
- Thread starter Trvlwanderer
- Start date
I've been looking at this SPX chart and if today's modestly bullish action is confirmed we certainly could be in the 20's by Friday, unless there is a big surprise from the Fed tomorrow onward and upward.
Buy red trail breakouts 
DJ30 monthly. Will addition of high flyers and deletion of garbage get us to the 16k and then party is over? Quarterly options exp coupled with this major index change will certainly keep things interesting.
Problem with lines connecting higher highs is that price can react down then as time burns the line goes higher, so the uptrend can be kept intact, they are good exit points, but not necessarily reversals.
I was looking at this as more of a long term megaphone, broadening top. As I understand it these are exhaustion type patterns. Just another piece in the puzzle.
mastacoli,
do u also take in to consideration things like fomc or "events" ? most of you guys trade es by T/A only?
Yes I know the pattern well, but it's not an easy trade, much better and safer to let the downtrend develop, no reason to short high to do well when shorting. Then it's just a matter of associating the downtrend and the megaphone. At the same time, the line does not have to hold, it is a big one, it could bend for hundreds, thousands of points, and much later, break down. This is one of the many annoyances of using counter-trending lines.
no. strictly looking at it as a guide and what could happen. i would never just take a short or long based on a touch of the line. plus this is monthly
in SPX the market bounced off this line around 1590 and promptly dropped 50+ pts before it retested it and blew through up to 1680s. then it retested it breaking below to touch 1560 and rebounded up to 1710s. crazy stuff.
attached is SPX monthly. lots of lines crossing up around this area.