YM, ES and DJIA Analysis

[BlowFish]

	Quote:	TinGull
	Another thing to note via VSA... The low volume hammer is a "test" as it ran down but was quickly brought back up towards the highs on low volume showing there was no "professional" activity to follow it through to the downside.

That was exactly the bar I was talking about - a long on the close would not be wrong following plain old VSA. (a picture is worth a thousand words guess I should not have been so lazy). I noticed your post with a similar chart on another thread (albeit a far less 'deep' test). I know a couple of VSA vets that give this particular setup as one of there favourites. Its something well worth recognising.

Didn't realise it was fed day that might explain the current lethargy on the index futures.

Cheers.

[TinGull]

Ah yes....Fed week. Woohoo for that. Guess that just means the markets kinda tread water while my s&p spreads decay into my account....awesomeness!

But yes, that's a very popular method of entering into the markets...on low volume tests.

[brownsfan019]

It's hard for me to take a trade with low volume after a candle pattern... Just seems counterintuitive to me. I would like a strong pattern, at support or resistance with healthy volume. That is a great setup in my book. Now taking a trade after a strong candle pattern has formed only if the volume is weak on a retest just seems that you are late to the party doing this. What if that retest never occurs and you get a large WRB after the candle hammer? Just say oh well?

As I've mentioned before, the candles are one of the quickest ways to get into trades. Of course, that will lead to false moves as well. You just have to maximize the gains on the winners.

[TinGull]

	Quote:	brownsfan019
	What if that retest never occurs and you get a large WRB after the candle hammer? Just say oh well?

That's the sad but true fact of the confirmation "test"....sometimes it might not happen.

[OAC]

Those Who Don't Use Volume Candles Should Give It A Testdrive On October 31 At 2:15pm Est
Zoooooooooooooooooooooooo ooom !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!

[brownsfan019]

	Quote:	OAC
	Those Who Don't Use Volume Candles Should Give It A Testdrive On October 31 At 2:15pm Est Zoooooooooooooooooooooooo ooom !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!

Very true OAC.

Check out the volume based candles on Fed day and you will see how these may or may not help you.

[brownsfan019]

This long should have been closed out today after seeing an inverted hammer/spinning top type pattern on Monday's close.

Not a big trade, but approx:
entry @ 1513.50
exit @ 1540.50 (one tick from the low of the inv hammer)
gross profit of 27 pts = $1350/ct

Not bad for about a week of work.

New chart:



The inv hammer was confirmed today with a bearish day. If you want to go short (disregarding Fed on Wed), the short was at 1540.50 (reversal from long position directly into a short position). Current price is approx 1536.25 Tue evening.

Again, a pure chartist is short saying that the Fed news is priced in already and gave a nice short opportunity. I personally would be leary of holding a swing trade into a Fed announcement as we know price can spike everywhere. I think to hold this short into the Fed would require a looser stop, which at the minimum would need to be placed above the most recent resistance level.

I'm going to go out on a limb and say that I should just follow the chart and leave my wonderful analysis out of the picture. We'll see how it looks tomorrow.

[james_gsx]

Brownsfan, did you actually take that trade?


I was just looking over my charts and basically saw the same thing. I also agree with the fact that the Fed news is priced in and the chart is setup to move with what the Fed says. It's easy to say that in hindsight and find everything to agree with the move.

(I'm not sure if I'm setting up the support levels right or not, but you get the idea of the wedge). Theres a wedge on the ES, and since the market has been trading sideways for the last few months I would lean towards a bearish setup. This recent rise has been done on very low volume, compared to downward moves have much stronger volume. The ES is also up against resistance, where we saw the spinning top on Monday followed by the bearish candle.





Same basic chart on the YM. Does anyone see something I don't see?

[brownsfan019]

	Quote:	james_gsx
	Brownsfan, did you actually take that trade?

Unfortunately, no.

Due to our discussions here, I am strongly considering doing more swing plays. My main focus for awhile has been the day-to-day trades and out by 4:15pm. While that works, as you know, I think there's more stresses and such involved. For me, the daily just is cleaner and gives plenty of time for analysis. So, it's a good thing we got this forum area going b/c it's re-opened my eyes to a few things.

[brownsfan019]

James,
Your charts look good. Just keep in mind with the S/R you are looking for times where price hit the level at least twice and you are really looking at the upper/lower shadows. You want to see where price was rejected a number of times in the same area. It will never be perfect - where price always rejects exactly at the same price, so I refer to them as 'zones' or 'areas'. It's basically a connect the dots if you will.

We can start a new thread dedicated to drawing S/R levels based on the candlestick analysis and nothing else. I'm guessing it will just be you and I discussing (maybe Tin will chime in ).