Simplicity in TA
- Thread starter Xspurt
- Start date
A perfect move down and lots to discuss. The whole prior movement has been called in advance including the type of PA that would unfold - that's the power of TA.
The drop has been a treat and now we close on double monthly lines on a daily/4hr channel with a perfect ABC into big volume.
Review and next weeks expectations to follow.
The drop has been a treat and now we close on double monthly lines on a daily/4hr channel with a perfect ABC into big volume.
Review and next weeks expectations to follow.
Last month I looked at the bearish monthly candle mid month and noted that it was happening in April when there was a 12 month cycle over the past few years.
It looked great but the problem was it was mid month with a call for a strong weekly cycle up and that is why I was so interested in the monthly close - would it give a top signal?
The chart to the right shows the monthly got caught in the weekly strong move up that was predicted but it closed on what I was hoping to see - a bearish Doji.
We now have a big bear monthly candle out of a rising wedge which is a powerful break. However the candle is now sitting on several monthly support lines. Is it going to repeat last months action and finish the month with a reverse move up or will we get the confirmation of the bearish doji ?
Let's see who looks to be holding the cards in a later review.
It looked great but the problem was it was mid month with a call for a strong weekly cycle up and that is why I was so interested in the monthly close - would it give a top signal?
The chart to the right shows the monthly got caught in the weekly strong move up that was predicted but it closed on what I was hoping to see - a bearish Doji.
We now have a big bear monthly candle out of a rising wedge which is a powerful break. However the candle is now sitting on several monthly support lines. Is it going to repeat last months action and finish the month with a reverse move up or will we get the confirmation of the bearish doji ?
Let's see who looks to be holding the cards in a later review.
Could you confirm where the monthly support lines originate from?
I've got the backtest of the downtrend starting at the 2007 high. Just below that I have the horizontal supports from last fall, coming in around 12,250 or so. Around that same level a downtrend from the May and July 2011 highs. Next level down would be trendline from the March 2009 lows but that's another 1000 points away.
I had the downtrend backtests being hit on Thursday on both the Dow and S&P. Also was a hit on the uptrend off the Oct 2011 low on QQQ. I thought that confluence would probably give a rally but it was not to be...
I've got the backtest of the downtrend starting at the 2007 high. Just below that I have the horizontal supports from last fall, coming in around 12,250 or so. Around that same level a downtrend from the May and July 2011 highs. Next level down would be trendline from the March 2009 lows but that's another 1000 points away.
I had the downtrend backtests being hit on Thursday on both the Dow and S&P. Also was a hit on the uptrend off the Oct 2011 low on QQQ. I thought that confluence would probably give a rally but it was not to be...
Quote from cornixforex:
Weekly 123 reversal worked nicely, didn't it?
Perfect.
Same as what you post in a 1 min or 5 min chart on your blog. A chart is a chart is a chart regardless of the time frame.
All that differs in a big time frame is how we use the fundamentals. Intraday news is a big deal on the low time frames but generally has less impact the bigger the time frame, whereas fundamentals affect the big time frames (Daily or weekly) and have less impact the lower we go in time frames.
But the PA is much the same.
Friday was a no brainer call long for me on the Eur with the weekly low setting up a pop or drop level. Soon afterwards I said it was a trend day and I might as well go to bed and let the trade run.
However we had a few friends join us in the trading room and David (arms raised) was all excited as he took the long with me off the 1m chart and later saw it take out the 2 hr candle which produced this cheer.
You can see from the expressions and head holding who was short, who was long and who was still on the sidelines deep in concentration looking for an entry. This is the beginners class on PA but some of the participants are a bit slow on the uptake.
However we had a few friends join us in the trading room and David (arms raised) was all excited as he took the long with me off the 1m chart and later saw it take out the 2 hr candle which produced this cheer.
You can see from the expressions and head holding who was short, who was long and who was still on the sidelines deep in concentration looking for an entry. This is the beginners class on PA but some of the participants are a bit slow on the uptake.
If volume is the heartbeat of the market then the Transports are its lifeblood and tends to be a lead indicator for the whole market. The Transports had a huge quarterly bear candle that needs to be taken out for the bulls to get back in control but the last 2 up candles volume showed a lack of confidence.
Moreover last week showed a strong weekly bear signal while the monthly and quarterly supports share the same horizontal as shown. We are almost breaking this support level and although we are 2 and 6 weeks respectively off the monthly and quarterly closes, the problem is the negative implication of this last weeks close below the weekly support.
The weekly chart signals lower prices but that is going to trigger the monthly sell making it more likely the quarterly will follow for a further long term confirmation.
From this backdrop I want to look at the Dow and see if the daily and monthly confluence can pull the rabbit out of the hat like Chelsea did in winning the European Champions League on Saturday.
Moreover last week showed a strong weekly bear signal while the monthly and quarterly supports share the same horizontal as shown. We are almost breaking this support level and although we are 2 and 6 weeks respectively off the monthly and quarterly closes, the problem is the negative implication of this last weeks close below the weekly support.
The weekly chart signals lower prices but that is going to trigger the monthly sell making it more likely the quarterly will follow for a further long term confirmation.
From this backdrop I want to look at the Dow and see if the daily and monthly confluence can pull the rabbit out of the hat like Chelsea did in winning the European Champions League on Saturday.
On a daily chart the FTSE is really weak and looks set to test the triangle support. A break would pull the market down. I'll be using this level to see it there is any interest in longs and looking to see if the UK leads.
London traders like to bounce the index on Gann numbers with 6000 being the top, a break here will target 4800 for a bounce and 3600 being the target.
London traders like to bounce the index on Gann numbers with 6000 being the top, a break here will target 4800 for a bounce and 3600 being the target.