What happened to S/R?

[mattjclark]

It seems to me, that the recent support and resistance points have been irrelevant the last three days.

What does this mean?

 

[catman]

It means you always have to be flexible with your trading ideas. Nothing is carved in stone and the market is constantly changing.
What worked yesterday might not work today.

 

[NihabaAshi]

Quote from mattjclark:

It seems to me, that the recent support and resistance points have been irrelevant the last three days.

What does this mean?

Which Support/Resistance numbers are you talking about ?

They seem ok to me.

Note: I traded the Eminis for the past 3 days...my reference is to that.

NihabaAshi

 

[mattjclark]

Certainly its a subjective art, but I have a definite S/R line around 1062 (on the NDX) that the market has totally ignored the past three days.


Additionally the psychological barriers of 1000 and 1050 haven't meant much lately.


I guess its just another lesson I'm learning. Sometimes S/R is the gospel, sometimes its just a theory.

 

[NihabaAshi]

Quote from mattjclark:

Certainly its a subjective art, but I have a definite S/R line around 1062 (on the NDX) that the market has totally ignored the past three days.


Additionally the psychological barriers of 1000 and 1050 haven't meant much lately.


I guess its just another lesson I'm learning. Sometimes S/R is the gospel, sometimes its just a theory.

All my support and resistance levels for the Nasdaq 100 Index (NDX) via 45min chart analysis have provided very nice signals for several months...

via falling thru support nicely on Short signals or bouncing off support nicely on Long signals...

via powering up thru resistance nicely on Long signals or pullback nicely at other resistance levels on Short signals...

Yep, best to follow any trade signals you get when such areas are reach instead of assuming resistance will only produce a price decline or support will only produce a price rise.

My psychological barriers are 1155 and 1112 for resistance and the current 200eMA (45min chart) for support.

Your also absolutely correct...s/r numbers are purely subjective.

NihabaAshi

 

[bone]

They've been working OK for the Bonds. If the market blows through, or grinds through a S/R level - it means something.

 

[ArchAngel]

Quote from mattjclark:
Certainly its a subjective art, but I have a definite S/R line around 1062 (on the NDX) that the market has totally ignored the past three days.

Additionally the psychological barriers of 1000 and 1050 haven't meant much lately.

I guess its just another lesson I'm learning. Sometimes S/R is the gospel, sometimes its just a theory.

The biggest issue with SRs is whether you're really looking at the price levels that actually constitute an SR area or not. An SR is only an SR if either it represents a real intraday supply/demand zone (not always identifiable from a chart) or a large enough group perceive a particular price area as an SR and act accordingly.

Perhaps the problem is that either there wasn't really a "definite" SR at 1062 on the NDX - in that case the market didn't ignore it, it just wasn't there.

Or perhaps more likely that you're expecting an SR to be a narrow absolute line instead of the fuzzy band it usually is - actually in this case if you plot a line at 1062 on an intraday chart of the NDX for the last few days, you do see some support/resistance behavior, but you have to look at it not as a zero thickness line at exactly 1062 but as the 1059-1065 zone (3 points on either side).

As far as "psychological" boundaries - 1050 doesn't have much psychology attached to it. 1000 does at times, but it's now so comparatively close to short term lows that psychology tends to shift toward the firmer demonstrated numbers.

SRs aren't really "subjective" (at least not in the normal sense of the word - there's an element of science involved) - it's a matter of whether you're using/computing the SRs that are really involved with the market's gyrations and/or the ones most of the market are using.

What creates support/resistance is people reacting accordingly to a price area. There are some real intraday supply and demand driven SR areas and then there are also the ones being used by a bulk of traders to guide their trading (you could perhaps consider them psychological even though they're indicator derived rather than just the usual "round number" type thing).

So while the 100 and 200 day EMAs are usually very important SRs, looking at say the 100 or 200 period EMA on an 8 minute chart isn't likely to give you as good results because there aren't that many (any?) people looking at it along with you - so it's not causing action/reaction.

 

[dbphoenix]

Quote from ArchAngel:

So while the 100 and 200 day EMAs are usually very important SRs

I wouldn't even go that far. More often than not, when price finds support or resistance at an MA, it's concurrent with previous price support or resistance. This helps to explain why MAs seem to provide S/R only occasionally.

--Db

 

[NihabaAshi]

Quote from ArchAngel:



The biggest issue with SRs is whether you're really looking at the price levels that actually constitute an SR area or not. An SR is only an SR if either it represents a real intraday supply/demand zone (not always identifiable from a chart) or a large enough group perceive a particular price area as an SR and act accordingly.

Perhaps the problem is that either there wasn't really a "definite" SR at 1062 on the NDX - in that case the market didn't ignore it, it just wasn't there.

Or perhaps more likely that you're expecting an SR to be a narrow absolute line instead of the fuzzy band it usually is - actually in this case if you plot a line at 1062 on an intraday chart of the NDX for the last few days, you do see some support/resistance behavior, but you have to look at it not as a zero thickness line at exactly 1062 but as the 1059-1065 zone (3 points on either side).

As far as "psychological" boundaries - 1050 doesn't have much psychology attached to it. 1000 does at times, but it's now so comparatively close to short term lows that psychology tends to shift toward the firmer demonstrated numbers.

SRs aren't really "subjective" (at least not in the normal sense of the word - there's an element of science involved) - it's a matter of whether you're using/computing the SRs that are really involved with the market's gyrations and/or the ones most of the market are using.

What creates support/resistance is people reacting accordingly to a price area. There are some real intraday supply and demand driven SR areas and then there are also the ones being used by a bulk of traders to guide their trading (you could perhaps consider them psychological even though they're indicator derived rather than just the usual "round number" type thing).

So while the 100 and 200 day EMAs are usually very important SRs, looking at say the 100 or 200 period EMA on an 8 minute chart isn't likely to give you as good results because there aren't that many (any?) people looking at it along with you - so it's not causing action/reaction.

Thanks,

Well said and it went into one ear and not out the other.

NihabaAshi

 

[murray t turtle]

Quote from mattjclark:

It seems to me, that the recent support and resistance points have been irrelevant the last three days.

What does this mean?

They are still there & Archangel made some good points.

Remember like Aaron Schindler wrote they're approximate zones, not exact.

No s & r isnt exact like gospel.

The more factors [converging] you have in support the better, including;

*moving averages[plural]

** 30 day support or 30 minute support is better than 8 minutes candle

***More factors also, but you can see why Larry Williams said in Active Trader magazine recently ''Use a thick pencil for trendlines''[more is better]