YM, ES and DJIA Analysis

[smwinc]

	Quote:	james_gsx
	So aside from personal experience and seeing this setup before, I wasn't really sure what to tell him. Any ideas? The 8 EMA also displayed resistance, but that's not exactly the best reason either.

(I know this is the Candlestick thread, but I'm just answering the question honestly)

Tax Loss Selling Period
+
Quadruple Witching Day (Friday)

Quad witching day is one of the most reliable pay-days on the market calendar. Add in some Tax Loss Selling and the technical's of where the markets are make it a no-brainer.

Edit: I know there are a few people who treat fundementals like they are a disease, but bluntly these two things were marked out for you literally a year in advance. I too ignore most fundementals analysts pull out after the action, but when it's a specific event, you gotta take the freebies the market throws at you.

[brownsfan019]

James,
Just a few quick notes on your chart:




Some notes:

> Purple circles represent pull back type trades. If using MA's, I would consider pull back trades.

> I'm curious why you'd consider a long at either of those points, other than there's a possible candle pattern there (the 1st one almost looks bearish to me).

[brownsfan019]

It's amazing how the picture can change when alter or add/delete something, doesn't it?






That's a daily ES chart w/ Bollinger Bands. All the "I hate indicators" guys can glance over this post.

My point is that I just through up some standard BB's on quote.com charts and look what you see here. That doesn't look too terribly bad in my eyes if you pay attention to extremes (upper/lower BB) and the mid-point line for possible resistance and/or trade setups. And again, depending on entry method being used, you can avoid some false reversals.

I know it's en vogue to give your allegiance to the non-indicator belief system, but if you study and know what you are using, it can be beneficial. If nothing else, the BB's here provide a road map of when to consider using a candlestick signal and when to avoid one. In the candlestick world, this makes perfect sense. Nison has often said that you cannot use candlesticks on their own - you need something else to help that signal. Here, I've chosen BB's. I happen to like BB's from a volatility stand point on a daily chart (intra-day is a completely different animal).

And as we all know, just getting a decent entry system together is half the battle. Next step is deciding how and where to exit. Most of the above shown trades in green lines made money. Some quite a bit and some others not so much. So it just depends on how you exit as to whether the above shown screenshot makes money or not. I cannot possibly say if it made money or not in real-time.

*********** *********** ***********

AND FOR ANYONE THINKING OF USING THIS AS A SYSTEM - I HIGHLY RECOMMEND YOU DO YOUR OWN HOMEWORK FIRST. IF YOU LIKE BOLLINGERS, GO STRAIGHT TO THE SOURCE AND LEARN ABOUT THEM.

[MC]

I called for a pullback test back on April 18th. I never thought it would have went this way and taken so long, but here is our test finally.

Macd and macd histogram divergence on last weeks close, which is lower than the prior closes. 200ma is double support backing this trendline as well.

Could get interesting on any hint of a rally.
JMHO

[MC]

The bigger picture, why can it be important to not solely focus on micro levels and step back sometimes?

In addition to my micro level chart we can now see a more defined channel. Plus much more is visible that is acting as support now. So, we have the downtrend broken and testing (from prior chart), 200ma and a now an added swing high as support. How about a trendline from all the way back to October 2004? CHECK!

This is a crucial but fairly low risk level to get long IMO. If it fails to hold though look out, we could hit 11k fairly quickly if this stuff gives way.

As always JMHO.

[firewalker]

	Quote:	MC
	200ma is double support backing this trendline as well. Could get interesting on any hint of a rally. JMHO

	Quote:	MC
	In addition to my micro level chart we can now see a more defined channel. Plus much more is visible that is acting as support now. So, we have the downtrend broken and testing (from prior chart), 200ma and a now an added swing high as support. How about a trendline from all the way back to October 2004? CHECK! This is a crucial but fairly low risk level to get long IMO. If it fails to hold though look out, we could hit 11k fairly quickly if this stuff gives way.

Hi MC, this is not an attack, just some healthy criticism, but...

(a) your channel lines aren't exactly parallel, you seem to adjust the lines to fit price
(b) why October 2004 and not -for example- October 2005? you seem to pick the level where to draw line looking for the right of the chart back to the left instead of the other way around
(c) yes the downtrendline is broken, but the line should not cross price if you connect the first two swings high. In fact, you are drawing another diagonal line on this chart than you did on the previous chart posted.
(d) I see you opted to use the weekly 200 SMA instead of the more frequently used daily one... the daily one paints another picture though:



I'm not discounting the fact that this level might provide support. But if it does, it will be more likely because of the March lows then because of a subjective line... There are just some inconsistencies in your charts. All imho obviously and no offense meant

[MC]

	Quote:	firewalker
	Hi MC, this is not an attack, just some healthy criticism, but... (a) your channel lines aren't exactly parallel, you seem to adjust the lines to fit price (b) why October 2004 and not -for example- October 2005? you seem to pick the level where to draw line looking for the right of the chart back to the left instead of the other way around (c) yes the downtrendline is broken, but the line should not cross price if you connect the first two swings high. In fact, you are drawing another diagonal line on this chart than you did on the previous chart posted. (d) I see you opted to use the weekly 200 SMA instead of the more frequently used daily one... the daily one paints another picture though: I'm not discounting the fact that this level might provide support. But if it does, it will be more likely because of the March lows then because of a subjective line... There are just some inconsistencies in your charts. All imho obviously and no offense meant

TA is an art, not textbook. So yes I'm using my eyes and instinct to put the lines where I think they fit and where the market participants are looking.

Weekly 200ma is what I use and others have as well...the market bounced there 2 times already. I use weekly as a way to filter the daily noise personally.

It's worked for me many times thusfar, so I guess we'll need to wait and see.

[firewalker]

	Quote:	MC
	TA is an art, not textbook. So yes I'm using my eyes and instinct to put the lines where I think they fit and where the market participants are looking. Weekly 200ma is what I use and others have as well...the market bounced there 2 times already. I use weekly as a way to filter the daily noise personally. It's worked for me many times thusfar, so I guess we'll need to wait and see.

No problem at all. Who am I to say this or that one is better, since I don't use MA's, other than just glance at them occasionally.

But even if you just use your eyes, I think you need to be consistent in the way you draw your lines. You can't define a channel and then have the lines not parallel next to each other... that's all I'm saying.

If you draw a trendline different on the big picture than on the micro-level, it's more likely you are looking for price bars to touch your line and support your hypothesis, rather than let price prove you right... I make mistakes too in these things, being to sloppy, especially if they are hand-drawn lines. But it's just something I thought was worth pointing out.

[ammo]

firewalker and mc,since u are discussing lines ,when drawing lines on dailys and hourlys,i sometimes use the candlesticks and draw lines on the body tops/bottoms and not use the small extensions where there was no volume,it sounds dumb, but a lot of times when a mrket turns above or below your line u will see the line they saw when drawing on candles, just food for thought

[firewalker]

	Quote:	ammo
	firewalker and mc,since u are discussing lines ,when drawing lines on dailys and hourlys,i sometimes use the candlesticks and draw lines on the body tops/bottoms and not use the small extensions where there was no volume,it sounds dumb, but a lot of times when a mrket turns above or below your line u will see the line they saw when drawing on candles, just food for thought

You mean you draw your lines where the bodies of the candles close instead of the spikes?