The Surf Report

[steve46]

You seem to be uncertain as to how to approach this recent price action.

As you look at this next chart, you will see now the action can be put into a useful context that allows you to calc the odds of a move (depending on the status of your basic statistics skills).

Here is a chart of the YM using daily candles, and with a fib retracement in place. You can see how the correction moved in stages, stopping along the way at predefined places (like .618 for instance).

The LRC is sized to 2 standard deviations, but if it were reduced to 1.5 instead you would see that the move from the top of that range was signalled by touching the top channel line. That touch allowed me (and some other folks as you can see) to calculate the odds of a move down at about 80%.

The move back up from the bottom of the channel had about the same odds of continuation, and finally, the recent move that you suffered through was signalled by a touch (and bounce off) of the midline.

Again it is just a matter of having a context in which to frame the action.

Hope this helps you a little bit. I know it must be frustrating not to know how to proceed.

Steve

 

[steve46]

Here is the action using 60 min candles, and again I have an LRC in place. You can see clearly that price is bouncing off the upper channel. Again the odds are in excess of 90% for the move down

 

[marketsurfer]

thanks for the analysis, steve. we will see what happens.

surf

 

[marketsurfer]

staying totally flat as the DJIA churns in the death channel.

holding OIL short. still just one entry, have not added yet.


surf

 

[steve46]

Here is a chart of today's YM for those who are actually in the game

What is important to note, is that you can make money from any number of clues to market action. In this case price moved to test the previous day's high and failed. As you can see from the trend lines, once that failure occurs, its pretty much time to load the boat (if you have one).

By the way, back a couple weeks ago, I mentioned that it might be a good idea to watch for "failures" like this, and trade them. Here is a link to that comment for those who might have an interest.

http://www.elitetrader.com/vb/showthread.php?s=&postid=1113071&highlight=failure#post1113071

All the best

Steve

 

[steve46]

By the way MarketSurfer, my posts here (your thread) will stop with this one. I intended simply to show anyone interested that the LRC is a viable method of orienting yourself to price movement AND it allows you to add the dimension of statistical analysis IF you wish. Of course, one still has to learn some techniques, and exercise good judgement. I appreciate your letting me take a moment of your time.

Good luck with your work in future.

Steve

 

[marketsurfer]

hey steve,

thanks for the insight. i am always open other analysis. nice call on the market!

surf

 

[marketsurfer]

man, what a day today! the DJIA broke the lower channel figure but not by the system's parameters to trigger entry ( full 3 minutes sub line) therefore we are still flat the djia.

the "almost back to even" oil shorts gave back a bit today with the rise, still holding first entry at this time.


best,

surf

 

[Pekelo]

Quote from Pekelo:

I don't know Surf, I think we are due for a 150-200 pts downmove...

Let's repeat that chart 7-8 days later, and 250+ pts lower.

 

[marketsurfer]

thanks, pekelo. nice call!