YM, ES and DJIA Analysis

[james_gsx]

Wow! Those targets were hit in a matter of days.

[Ronin]

Brown19,

Here is the Post you deleted:

I'm wondering what the 100 pt guarantee was though - is that on the YM,
ES, something else? I can see the reason for bullish sentiment, but a
100 pt guarantee is a bit steep in my opinion.

Brown 1355.50 is 100 Points from this morning Low : 1255.50 and the ES high this morning is 1323.75 !

[brownsfan019]

	Quote:	Ronin
	Brown, Here is the Post you deleted: I'm wondering what the 100 pt guarantee was though - is that on the YM, ES, something else? I can see the reason for bullish sentiment, but a 100 pt guarantee is a bit steep in my opinion. Brown 1355.50 is 100 Points from this morning Low : 1255.50 and the ES high this morning is 1323.75 !

I didn't delete anything smarty - it's right here - http://www.traderslaboratory.com/for...html#post28576

Not sure what you are talking about deleting of posts. It's right there. Just have to open your eyes.



But, I guess time will tell if the 100 pt Ronin guarantee holds up or not. I see you also chose the 55.50 level, which oddly enough was the limit lock down level, yet your post was WAY after that fact...

Odd...

Anyone can play that game - the HOD of the day shortly after 11am will be 1324. Never mind that it's now 11:28.

My point was that to call a 100 pt move FROM THE TIME YOU ACTUALLY CALLED IT was a bold prediction. I did not realize you were going back in time and calling it from the lock down level... It's so easy being a trader after the fact, isn't it?

[brownsfan019]

James,
Thoughts on these daily hammers?

[james_gsx]

I think it signals a TON of buying at those levels. I think a lot of the negative news we have been hearing and slightly on the horizon was priced in. I also think that whole decline from 12,500 down to 11,450 was the "crash" and I expect us to test 13,000, possibly 13,500. I do expect pullbacks before that, but it's my overall target. The reason for this is because I think it's very similar to what we saw back in august, so short term I'm bullish. I want to see several higher lows before I will feel safe calling this a new bull market.

Here are my annotations from last night.

[MC]

Notice the red vertical lines where the monthly ATR (Average True Range) breaks upwards, this measures volatility. Volatility is caused by what...EMOTION and PANIC. This is where the pro's are in control and they scare and whipsaw you till you're rich or broke (usually broke). In this high ATR range, fortunes can be made or lost quickly due to the jerky, exaggerated movements of the market. If you're not experienced it's probably best to sit out and start in calmer waters or just paper trade. This is why they say you don't know $hit till you've made it through a bear (high volatility) market. Low ATR bull markets are easy to trade and most anybody can make money or at least lose minimally in those conditions. This recent action will eat most people up.

Let me preface this by saying THE MARKET IS NOT ALWAYS LOGICAL.
Now you can see the "logical" thing is for them to test the area where this volatility started. The blue horizontal lines indicate the price level where this high ATR began. The Y2K bear tested that level 4 times and held.

THIS markets action we see the blue line is also holding up at this point. This is a monthly chart so the last candle is still open for a few more days but IMO it should close above that level. We also see the fib retracement...the 38.2% was bounced off which is a healthy retracement level assuming it holds. This is why I'm not overly bearish at this point. I think with the "easy button" (as I call it) the amateur traders today can cause the panic faster than ever. Look at the rocket ATR did on this drop. I have to think the pros got the prices they wanted and will support the levels I've posted on the other chart prior (10,760ish). Again I think this because they won't trash the market while still in it and IMO they are very much still in it. Using auction mentality AND the 50% fib retracement (10,760ish), that is kind of the point of no return IMO. That breaks and all hell breaks loose since those long term green positions of many years turn to red. This would be fine if big money wasn't still in the market, they don't care about retail investors. I think they have holdings at stake, this is really the $5 trillion dollar question.

Has the news has crippled your ability to think for yourself? It has for many traders and general population that don't know better. Follow the news if you want to be mislead and get the inside track AFTER it's happened. NOW the job numbers are up, hrmmm kind of makes you curious, no? I'm not saying I'm pro by any means, just that I know enough now to not listen to the hype. If anything use it as a BS meter to know when the market might need to be faded.

Now onto what "may" happen next. Anything is possible, but I expect some chop and probably some further tests of the 38.2% fib and blue line. MAYBE as low as that 50% fib line, though it would be risky for big money to let that happen. If that 50% retracement breaks I would RUN and hide from the market till the dust settles. Either scenario...dust settling to me will be something like the pink trend line where we get a breakout above of the downtrend WITH a breakdown of the ATR. Bull markets don't happen on high volatility, so when we get a lower ATR the bulls can come back out to play.

Below is also a volume by price chart I did on 1/24. Pretty much jives with the above monthly chart.

[smwinc]

Let me preface this with I am a big fan of candlesticks and using them for trading.

However, to add value, please suggest entry prices with your analysis, or, how you personally would use them to place or manage existing trades. It is very easy to get caught analysing 'after the fact' with candlesticks.

Right now we are trading at 1322 in the S&P E-mini March contract.

If you had taken a long position the moment those screen shots were taken, it would be an entry of 1335-1340, with a current Max. Adverse Excursion of 13 - 18 points.

[james_gsx]

I know this is after the fact, but look at that spinning top we got the other day! First a hammer on support, then a text book doji/spinning top to signal our exit. Right now we have our confirmation candle and the next support area is the 21 EMA or 1,350. I suspect this latest push up was a fake out before testing some of those January lows. But we will see what happens.

[brownsfan019]

James,
Saw this in real-time while day-trading and was curious how today would play out...





That kind of a retest from the Jan lows was a gift to anyone watching.

Few different ways to have played this, but a profitable trade nonetheless.

I did NOT take this in my account as I am 100% daytrade mode currently. No confidence holding overnight with what we've seen going on.

[james_gsx]

Nice find Brownsfan! I actually had that noted on the whiteboard next to my desk. But like you, I don't feel safe holding any futures trades overnight. Monday morning I made a few trading mistakes because I wanted the market to fall, and it was going up. Had I actually looked at the daily chart during the day I would have seen that big support level and would have faired fading it, instead of trying to go for the miracle breakout that rarely comes. Lesson learned.

And let's get this thread going again!