today's a key day!

Quote from fader:

i don't follow the compx but i have recalled your post because i was just looking at the daily dow, and even though i don't trade off daily charts, i like to look at them, and it has occurred to me that this may be indeed an interesting chart point here, i.e. test of this year's uptrend line - i am not an expert on technical analysis, i just draw trend lines on these longer term charts the way i "see" them.
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Yes i see that too!
In my market momentum work, the Dow is not sufficiently oversold for an intermediate term bottom, neither is the SP500. The Naz is, but I'd like to see it getting more oversold, and it usually does.

If we rally from here, I believe we will be stuck in the same trading range and significantly lower lows will be necessary to end the correction.

If we continue the selloff, an excellent bottom can be established.

Can't predict the market...can only read it...and project potential scenarios. The market is the final word :)
 
Quote from CharlesTrader:

It is interesting how the market will key off of this range from time to time.

I made a snap shot on 9/20/05 after the FOMC announcement. Look how the market traded down to the lower range of the Value Area, then tested the upper range, and then broke through the lower range to end-up at the lower end of the day's Average True Range (ATR).

You can find more about it in "Mind Over Markets" by James Dalton

Charles
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Charles,

Please keep us informed on what this indicator is projecting. It looks quite interesting.. TY
 
The new Value Area is 1220.75 - 1215.25. The high volume price for Friday was 1217 (blue line). With the high volume price at the bottom of the range idicates that there is a large shelf of support in the 1217 to 1215.25 range. Notice how the market settled on top of the Value Area Range at the close.

There is also a resistance line at 1225.5.

Charles
 

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Quote from CharlesTrader:

The new Value Area is 1220.75 - 1215.25. The high volume price for Friday was 1217 (blue line). With the high volume price at the bottom of the range idicates that there is a large shelf of support in the 1217 to 1215.25 range. Notice how the market settled on top of the Value Area Range at the close.

There is also a resistance line at 1225.5.

Charles
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This is a very short term indicator right, like day trading?
 
Well, you now have me wanting to look at this Value Area thing in more detail.

The High Volume Buying Range of 1217.5 to 1214.75 occurred over a three day period. That is a lot of buying volume. Lots of support!

The High Volume Selling Zone between 1227.75 to 1225.75 occurred over just one day. Resistance, but not as strong as the buying range.

It will be interesting to see if the market takes the path of least resistance to the upside or just wiggle waggles between 1227.75 and 1214.75.

Charles
 

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Quote from gharghur2:

This is a very short term indicator right, like day trading?
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Yes and no.

I use it for day trading purposes, but as you see in my last post, it can also be used for longer term analysis.

Charles
 
Some Additional explanations of Value Area.

1. The High Volume Price (blue line) is a point of market equilibrium. This is where you have an equal number of buyers and sellers - essentially.

2. The Value Area Range is basically 1 standard deviatiion of that equilibrium. Market activity within that range is normal market noise. Most of the time you have a normal distribution where the High Volume Price is in the middle of the range. Other times the range is skewed, where the High Volume Price is closer to either the top or bottom of the range. When there is buying pressure and the market is trying to move up, you will oftern see the High Volume Price near the bottom of the range, and vice versa for selling pressure when the market is trying to move down.

3. If the market moves out of the Value Area Range, something new is occuring. If to the upside, there are new buyers in the market. If to the downside, there are new sellers in the market.

A quick and simple explanation of Value Area.

Charles
 
Quote from CharlesTrader:

Yes and no.

I use it for day trading purposes, but as you see in my last post, it can also be used for longer term analysis.

Charles
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Charles,

I'm still negative on the INX and INDU, momentum-wise they have not bottomed. But, I can't rule out an extention of the aug-sept trading continuing at this time. Keep us posted, this looks like a very keen indicator TY

Tony
 
Quote from gharghur2:

Charles,

I'm still negative on the INX and INDU, momentum-wise they have not bottomed. But, I can't rule out an extention of the aug-sept trading continuing at this time. Keep us posted, this looks like a very keen indicator TY

Tony
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Pardon the intrusion, but what make you think this market is gonna go down when is stubbornly refusing to drop in the red for the year. And this has happened many times during one of the period with most bad news.

If we can go up with bad news sure we will rally with good ones and do not forget we are two months away from year-end and still almost flat for the year: if the market wanted to tank it would have already done it by now and we would be in the red big time, not agonizing around breakeven.
 
Quote from Bitstream:

Pardon the intrusion, but what make you think this market is gonna go down when is stubbornly refusing to drop in the red for the year. And this has happened many times during one of the period with most bad news.

If we can go up with bad news sure we will rally with good ones and do not forget we are two months away from year-end and still almost flat for the year: if the market wanted to tank it would have already done it by now and we would be in the red big time, not agonizing around breakeven.
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Hi!

I just follow my MMI (market momentum indicator) I've used for over 20 years. I have a 'buy signal' in the COMPX , but not the INDU or INX. Usually they trigger all together.

I agree the market has had ample opportunity to drop this week, and did: low on COMPX was 2093 and retested the same day before this bounce, was expecting 2079 worse case.

I don't see that much downside risk overall, maybe another 1.5% in the S&P and the DOW. No tanking, just a finishing off of the correction from the August highs.

tony
 
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