The Pinch Journal

I'm very excited for 2020 and hope the market switches its trend and starts to get cheaper. We all need prices to go down A LOT. I hate how expensive everything is, don't you?? The more down the market goes the better..

hell, i'll take the SPX low of 666 in 08! I don't mind man, we all need cheaper numbers to crunch on.

Lets focus and prosper in 2020
 
THE COMPOSITE MAN

Wyckoff proposed a heuristic device to help understand price movements in individual stocks and the market as a whole, which he dubbed the “Composite Man.”

“…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” (The Richard D. Wyckoff Course in Stock Market Science and Technique, section 9, p. 1-2)

Wyckoff advised retail traders to try to play the market game as the Composite Man played it. In fact, he even claimed that it doesn't matter if market moves “are real or artificial; that is, the result of actual buying and selling by the public and bona fide investors or artificial buying and selling by larger operators.” (The Richard D. Wyckoff Method of Trading and Investing in Stocks, section 9M, p. 2)

Based on his years of observations of the market activities of large operators, Wyckoff taught that:

  • The Composite Man carefully plans, executes and concludes his campaigns.
  • The Composite Man attracts the public to buy a stock in which he has already accumulated a sizeable line of shares by making many transactions involving a large number of shares, in effect advertising his stock by creating the appearance of a “broad market.”
  • One must study individual stock charts with the purpose of judging the behavior of the stock and the motives of those large operators who dominate it.
  • With study and practice, one can acquire the ability to interpret the motives behind the action that a chart portrays. Wyckoff and his associates believed that if one could understand the market behavior of the Composite Man, one could identify many trading and investment opportunities early enough to profit from them.
 
"The abstract came first. Ever since I became conscious of my existence I have had a passionate interest in understanding it, and I regarded my own understanding as the central problem that needed to be understood. To understand oneself-- gnote aucton; nosce te ipsum -- is an impossible task. To achieve anything resembling knowledge we must be able to draw a distinction between subject and object; yet in this case the two are the same. What one thinks is part of what one thinks about; therefore, ones thinking lacks an independent point of reference by which it can be judged, it lacks objectivity."

#SOROS
 
"TA is like nautical charting. A sailboat rarely points to it's port of call. It's always adjusting itself to the wind and currents.

It creates reference points and context.

Wind and currents in the markets are like price and volume. When they are both heading in the same direction, lots of distance can be covered. When they are going sideways to each other, choppy waters ahead. When they are opposite, expect change.

FA is more like the specs on the boat. Growth in earnings is like larger sails. Book value is like the materials that make up the boat, enterprise value is the size of the hull. Dividends are gas for the back-up engine that keeps you going when their is no wind and current.

The analogy goes on and on.

And like weather, it's kinda predictable but that's not where the value lies. It is in the anticipation of unfolding scenarios, each possible until it's not, limiting possible alternatives until the one that actually realizes." @Sprout
 
I like the journal and the concept, thanks.

Just to clarify my understanding, would VG and TUP currently be likely candidates (upon confirmation of an up signal)?

Thanks
 
.simga,

How do you scan for potential pinch trades? Do have some kind of scan or exploration that you can automate to find candidates that you can then study more closely?
 
ges said:
.simga,

How do you scan for potential pinch trades? Do have some kind of scan or exploration that you can automate to find candidates that you can then study more closely?
More...

What I did was scan Finviz for stocks down XX% over XX period (the XX is up to you)
Then punched those into my TOS chart to come up with a couple.
As for my confirmation, it is a close over 20 DMA
 
DTB2 said:
What I did was scan Finviz for stocks down XX% over XX period (the XX is up to you)
Then punched those into my TOS chart to come up with a couple.
As for my confirmation, it is a close over 20 DMA
More...

Thanks for the info. I was thinking a scan using the levels of PPO and ADX along with volume. I'll have to sit down with my charting program and mess around with it.
 
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