Simplicity in TA

Quote from dv4632:

Was this a sell signal on the Dow?
More...

Hi dv, you didn't mark on your chart where exactly you thought the sell would be and that would help answer the question i.e. is "that" a sell?

Assuming the break of the trend line is what you meant, then the problem is that red trend line is based on the weekly bars and not the daily bars. I was using it and the weekly doji to set me up for aggressive short selling.

While the break of the red line of the weekly wedge is very important, I'd use a different approach for the daily short signal than just the break of your line and I will post that set up next.

The more conservative classic trend line enclosing the daily bars in the wedge is using the white trend line on the attached chart and you can see how it caught this low.

It is not unusual to have this double fulfillment where we get a convincing break to a conservative support and then a repeat. The possibility of a repeat is what I will look into over the weekend.
 

Attachments

Quote from Xspurt:

Hi dv, you didn't mark on your chart where exactly you thought the sell would be and that would help answer the question i.e. is "that" a sell?

Assuming the break of the trend line is what you meant, then the problem is that red trend line is based on the weekly bars and not the daily bars. I was using it and the weekly doji to set me up for aggressive short selling.

While the break of the red line of the weekly wedge is very important, I'd use a different approach for the daily short signal than just the break of your line and I will post that set up next.

The more conservative classic trend line enclosing the daily bars in the wedge is using the white trend line on the attached chart and you can see how it caught this low.

It is not unusual to have this double fulfillment where we get a convincing break to a conservative support and then a repeat. The possibility of a repeat is what I will look into over the weekend.
More...

Correct me if I'm wrong, but your chart looks to be forming a p/a pattern that is very bearish. An inverted cup and handle on the daily + the rise on VERY low volume = I'm bearish.
 
Thanks RN for stepping in on where to take action.

dv there are different ways to read the market and hence different ways to trade PA. What I am looking to do is combine intraday set ups with daily, weekly and monthly swings because in an election year, and especially with three faces Obama in control, I expect lots of manipulation.

Anyone who is a one trick pony trading this market is likely to end up as a victim in a well organized wealth transfer.

I have attached a 2 hr chart with the weekly support levels in light blue.

When PA broke down through the weekly wedge red line, bounced up on the blue weekly support, failed to take out the top blue trend line and once again broke the weekly red wedge line I thought it was all over intraday (top red arrow).

A more conservative trade is taking out the weekly support (lower red arrow).

The reverse long trade is when PA fails to take out the lower horizontal weekly support and yields to the rising daily wedge (white) with the green arrow showing the trigger.

There is a more aggressive trade set up on the hourly candles.

As far as daily signals go, I would use the lower red arrow for the daily signal as everything was primed to go and to reverse long would be over the top of the inside green daily candle.
 

Attachments

Quote from LEAPup:

Correct me if I'm wrong, but your chart looks to be forming a p/a pattern that is very bearish. An inverted cup and handle on the daily + the rise on VERY low volume = I'm bearish.
More...

It's not what would catch my eye simply because the cup is quite shallow and therefore the downside projection is not alarming.

When looking for a C&H it is best to wait for something that takes a good length of time to form and has a deep cup so you can sit in the trade with a big projection.

This is more of a daily scalp set up if it completes.
 
X, from what you show on the 2 hour chart it looks pretty clear. But from my perspective it would have to be traded on smaller timeframes, and I see you make reference to that in your post. Glad I'm cleared up on that as I was thinking you were presenting a way to enter/exit trades without getting into intraday charts, which I why I've been scratching my head a few times here. So from the looks of it you enter intraday and then have to option to manage it into something bigger if you desire.

But it makes a lot more sense now. The higher of your two blue support lines was broken in premarket but was a textbook case of test, bounce, fail in the YM. But it always looks easy in hindsight so I have be careful there. ;) The second one seems fairly easy too though my 2-hr bars (thinkorswim) don't all look the same as yours. For example you've got a doji at the low this week and I don't have that. My 2hr DIA chart looks the same, doesn't have a doji this week at the low.
 

Attachments

Quote from Xspurt:

It's not what would catch my eye simply because the cup is quite shallow and therefore the downside projection is not alarming.

When looking for a C&H it is best to wait for something that takes a good length of time to form and has a deep cup so you can sit in the trade with a big projection.

This is more of a daily scalp set up if it completes.
More...

Agreed. I'd like more span.
 
I missed posting last weekend but it's been all one way traffic because of central bank intervention. As we are getting QE4 by the back door that means great moves down with great return bounces. As covered earlier, in an election year crashes are rare and the market is as rigged as it gets and will continue to be so until something gives. This has been tried in various forms many times in the past and the longer it runs the worse the results. When central banks are left holding the bag in a low volume market and they are forced to sell all hell breaks lose.

They could lose control if Israel hits Iran and oil spikes, or we have a natural disaster or the Euro limps into another crisis. Apart from that I expect more of the same and the good news for is the Obama is being supported to the hilt.

I like the way Larry Levin puts it...

"From Bloomberg we read…http://www.bloomberg.com/news/2012-...esting-reserves-in-u-s-equities-today-1-.html


The Bank of Israel will begin today a pilot program to invest a portion of its foreign currency reserves in U.S. equities.

The investment, which in the initial phase will amount to 2 percent of the $77 billion reserves, or about $1.5 billion, will be made through UBS AG and BlackRock Inc. (BLK), Bank of Israel spokesman Yossi Saadon said in a telephone interview today. At a later stage, the investment is expected to increase to 10 percent of the reserves.

A small number of central banks have started investing part of their reserves in equities. About 9 percent of the foreign- exchange reserves of Switzerland’s central bank were invested in shares at the end of the third quarter, the Swiss bank said on its website.

The investment will be made in equity index trackers and will include between 1,500 to 2,000 shares, among them stocks like Apple Inc. (AAPL), Saadon said.

I wonder how many more will follow? Ben Bernanke is not allowed to directly invest in equities, although he certainly wants to. No matter – he can get his friends to do it…WITH a guarantee of profits. Remember, if they lose money Bailout-Ben will, umm, bail them out.

Rigged? You bet your @$$ it’s rigged. The global central banking mafia sticks together and their openly admitted goal are higher stock prices in order to boost “confidence,” which will hopefully improve the overall economies.

No wait – it’s really a “free market”…really, I promise."

I am back with the finger on the short trigger for another round of call my bluff. I called for a FTSE false break and after looking forceful we got 20 days basically going sideways before dropping into this slingshot up.

Next post will develop my short reasoning.
 

Attachments

The Dow looks bullish here popping out of the wedge but I want to look for a short as I think this is as real as the FTSE's break. Two weeks back I said I wanted short we got 200+ drop in a day into the wedge base with a clear reversal set up.

Since that we have 7 consecutive up days and Gann would place a stop under the low of the 7th day and every higher bar bottom. I like to use the idea more as an alert and look for a reversal signal rather than stop out.

The Dow doesn't show any resistance that I can see in a quick analysis so I am using the FTSE as a guide.

I like the daily and the 4hr cycle for an attempt to the downside so let's see how we go. The 60m pattern usually has a drop, pullback and then the real move but this is a less reliable read over the weekend when there is a bigger chance of a gap opening.

The selling volume on Friday was very heavy and I like the look of that.
 

Attachments

You must log in or register to reply here.
Back
Top