Simplicity in TA

Quote from dv4632:

Looks like it tried to give a continuation signal on Monday but couldn't hold it. Tried to give a reversal signal today but again couldn't hold it. So it's a stalemate. :)

Kinda hard to get too bearish when stuff like this is getting mainstream attention: :D
http://www.businessinsider.com/notorious-market-timer-joe-granville-predicts-a-50-crash-2012-1
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I think Joe will be proved right in the downside sentiment. In any business when volume of sales dries up prices drop to woo buyers back. The stock market is much the same but with a few added twists. Yes there is a lack of volume but if we were to take out government stimuli the picture would be a hell of a lot worse than the glossy rally we see now. Sooner or later that will dry up and then watch what happens.

In the '29 crash the bellwether was steel and although the broad market was consistently falling banks bought every dip in steel to make the index look better than it was and to protect themselves with all the stock they had securing loans.

Eventually they ran out of money and had to sell their steel stocks which caused panic as the bellwether crashed. Same thing with the Japanese Nikkei in the '87 crash. They claimed a new economic paradigm superior to the west that was crash proof. Sure enough it kept rising while the rest of the world crashed and as a rookie I owe my hide to boss Peter in Lehman's who refused to let me short the Niki because he twigged it was a rigged market.

Same thing happened as in '29: the government ran out of cash and the market did a spectacular fall from 40,000 to around 8,000. The government lies were exposed, heads rolled and the resignations went on for years as they found out PM after PM was involved in the scandal.

Even here when we had Black Monday and the market had its biggest ever one day percentage fall there was a scam being planned. Next day, Tuesday, the market fell about 200 points but they marked the board up 200 points and it worked as buyers came in for bargains. It was 12 mths later before the scam made front page news in Barrons and as they said, What do we do? Prosecute the guys who saved the market?

Today lies, damned lies and statistics play a bigger part in the charade than ever before while Obama is borrowing more in 3 yrs than the electorate thought possible for anyone other than a lunatic when he was elected.

So it's not the attention that Joe gets that means anything for ask around and few people can tell you who JG is and fewer still know how he trades. What counts is the levels of short selling as that tells you when the herd is on the wrong side of the market.

As I said. I expect 2012 to rip the heart out of a lot of traders because we are facing so many dilemmas that have never converged before. I think there is a strong possibility of the kind of volatility that causes bears to get slaughtered along with the bulls as this becomes a roller coaster requiring very nimble trading.

Back to your observation on the signal: yes, 6 to7 days the market has sat on this resistance and the CR did not trigger. The most notable pattern is the FTSE showing a bear wedge.

More later.
 

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What do you think of the longer term secular market cycles? Wish I could find a chart but over the last 100 or so years the market has moved in long term bull/bear cycles of "approximately" 17 years or so. When the secular bear market of the 70's ended in 1982 we had a secular bull market until 2000. Now we are mired in another secular bear that "should" last until 2017 or so. But you probably already know this.

Within each major cycle there are smaller bull/bear cycles. In this major bear market we had bear cycle 00-03, bull 03-07, bear 07-09, bull 09-present. Our current cyclical bull is coming up on 3 years of age so I guess it is prudent to be on alert for signs of the next bear cycle. But at the same time tops are harder to call than bottoms (since greed is not as powerful and visceral an emotion as fear) so who knows this bull cycle could continue for another year or so.

Also, what do you think about the public's supposed underinvestment in the markets. (I don't know if this is a fact but it's the impression I get). Historically the professionals have to leave someone holding the bag and markets tend to make significant tops when the general public is feeling optimistic about the economy and freely investing. Yet I continue to read stories about the public not trusting the markets. This also could be why volume has been so low as Joe says. So do you think the markets can make a multi-year top when the public isn't really trusting the market?

Oh yeah, one more thing. ;) I thought the CR triggered a continuation on Wednesday. Wouldn't that be considered a breakout and close above the prior highs?
 
xspurt.. can u comment on the relevance of the t/line in this daily chart of the s&P Cash..?? (marked 2) Is it meaningful, in your view..??
Many thks for sharing... learning heaps..
 

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Good thread on combining the bigger picture with larger trading!/time frames & PA info. Great breakdown /charts ,Volume & price. Good 'putting the future possible price action into perspective" along with the market influences. Sharing your perspective.
This thread combines the elements of analyzing an overview of the larger environments, with the narrower focus of the faster term Price Analysis. I also appreciate the faster price bar/volume analysis.
I believe I also owe you an apology- if my memory serves me correctly- if my memory is flawed, simply disregard-
I have found this thread to be instructive and beneficial. And not egocentric!
Thanks, SD
 
Quote from dv4632:

What do you think of the longer term secular market cycles? Wish I could find a chart but over the last 100 or so years the market has moved in long term bull/bear cycles of "approximately" 17 years or so. When the secular bear market of the 70's ended in 1982 we had a secular bull market until 2000. Now we are mired in another secular bear that "should" last until 2017 or so. But you probably already know this.

Within each major cycle there are smaller bull/bear cycles. In this major bear market we had bear cycle 00-03, bull 03-07, bear 07-09, bull 09-present. Our current cyclical bull is coming up on 3 years of age so I guess it is prudent to be on alert for signs of the next bear cycle. But at the same time tops are harder to call than bottoms (since greed is not as powerful and visceral an emotion as fear) so who knows this bull cycle could continue for another year or so.

Also, what do you think about the public's supposed underinvestment in the markets. (I don't know if this is a fact but it's the impression I get). Historically the professionals have to leave someone holding the bag and markets tend to make significant tops when the general public is feeling optimistic about the economy and freely investing. Yet I continue to read stories about the public not trusting the markets. This also could be why volume has been so low as Joe says. So do you think the markets can make a multi-year top when the public isn't really trusting the market?

Oh yeah, one more thing. ;) I thought the CR triggered a continuation on Wednesday. Wouldn't that be considered a breakout and close above the prior highs?
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I might be able to save you a decade or two of study and frustration. Linear time cycles started with Kondratiev (40 - 72 yrs), then got shorter through Kuznets 15-25 yrs, Juglar 7-11yrs, Kitchen (3-5 yrs), Charles Dow (10 - 60 days) , Elliot (sub minute). The problem is all of these have +/- deviations but Schumpter didn't subscribe to fixed time cycles as he thought varying time cycles held more accuracy.

Gann was a major player in time and understood the play between linear and space time and how it impacts the market, but imo Hurst was the one who cracked the problem of conflicting cycles that create the distortions in linear cycles.

If you play any kind of linear cycle you will find it works but by the time you can project the next cycle there is a great danger that it will go out of phase because linear time projections will not work for long.

Re. market participation, the public is out of the market and for a very long time institutional money has replaced private investors. This is a bear market with decreasing volumes and government stimuli keeping it afloat. It is a false market and the ones left holding the bag will be the public in their IRA's and mutuals.

Market tops are easy to pick, market bottoms in a bear market are infamous for offering hope and destroying everyone who buys and holds. It is a real traders play that will sort the sheep from the goats.

Re. the C/R, it was on the daily candle and needed to trigger the next day. When it didn't the C/R no longer existed - it just became a messy pause. To find another C/R you'd have to see one form on the weekly charts and that has not happened.
 
Quote from rhk:

xspurt.. can u comment on the relevance of the t/line in this daily chart of the s&P Cash..?? (marked 2) Is it meaningful, in your view..??
Many thks for sharing... learning heaps..
More...

Ha, your cheating here as you learned a bit about this from an old thread you investigated and good for you. It's a bit beyond the scope of what I am doing here as I am trying to keep this out of the advanced level.

Post that on the "thoughts" forum and I'll deal with it there. It will derail us here.
 
Quote from sowterdad:

Good thread on combining the bigger picture with larger trading!/time frames & PA info. Great breakdown /charts ,Volume & price. Good 'putting the future possible price action into perspective" along with the market influences. Sharing your perspective.
This thread combines the elements of analyzing an overview of the larger environments, with the narrower focus of the faster term Price Analysis. I also appreciate the faster price bar/volume analysis.
I believe I also owe you an apology- if my memory serves me correctly- if my memory is flawed, simply disregard-
I have found this thread to be instructive and beneficial. And not egocentric!
Thanks, SD
More...

You sir are an gentleman. Thanks for the apology and the kind comments.

Family health issues and trading other markets constrains me from going into the really small time frames where for me most of the fun exists. However the methods don't change for the smaller time frame so hopefully daytraders will benefit from what they see here.
 
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