All You Need... is a Chart

[forsearch]

	Quote:	firewalker
	Are you being ironic? If not, do you have anything to substantiate those claims?

No irony here. No claims either. Just an opinion based on observations, anecdotes, and hearsay

Washington Post article: Plunge Protection Team - Sunday, February 23, 1997, Page H01

Presidential Executive Order 12631--Working Group on Financial Markets

Wikipedia entry on PPT

By argument, if the PPT exists, and it operates as it is said to, then, ceteris paribus, it must be the smartest of the smart money of all.

-fs

[Sledge]

	Quote:	firewalker
	Thanks for the comment. It was indeed the typical 'herd getting caught on the wrong side of the move'... would you consider the close of the first bar sufficient enough reason to go long immediately? It was only because there was potential support around that level that I would feel confident enough to do so. But you're right, it clearly showed how strong demand came in.

Ok if the area that the first bar dropped into and retreated at close was indeed on a support line- as long as the close was above the support line, I personally would probably taken the long at that point. You see I would have had to ride out the dead cat bounce but up in the long run.

However if the support line was below or very close to the close of bar #1, I would have waited for confirmation.

I trade a bit more aggressively than some. Very many folks would NOT take a long on bar #1 even after close as they want trend confirmation. To me if that bar closed far above Support but touched into that neighborhood on its tail- yes, that is a pretty strong indication that the market is bullish.

[firewalker]

	Quote:	Sledge
	Ok if the area that the first bar dropped into and retreated at close was indeed on a support line- as long as the close was above the support line, I personally would probably taken the long at that point. You see I would have had to ride out the dead cat bounce but up in the long run. However if the support line was below or very close to the close of bar #1, I would have waited for confirmation. I trade a bit more aggressively than some. Very many folks would NOT take a long on bar #1 even after close as they want trend confirmation. To me if that bar closed far above Support but touched into that neighborhood on its tail- yes, that is a pretty strong indication that the market is bullish.

Thanks for explaining. However the support was from way back in March and I couldn't exactly pinpoint it to the exact tick... it's more of a zone obviously.

And I agree, the best entry is often the most aggressive one

[Sledge]

	Quote:	firewalker
	Thanks for explaining. However the support was from way back in March and I couldn't exactly pinpoint it to the exact tick... it's more of a zone obviously. And I agree, the best entry is often the most aggressive one

Well as you know by the chart you posted, I'd be looking at a small portion of that entire picture. So blindly it would be a good call. Depending on how many times that support had been tested and how hard it was hit would show how strong it is. On your chart they gave it a pretty good beating and it held- so I would say that it is a good line of major support.

The caviat with it is this, if it is a major support, the market makers will need to draw out the floating supply. the Volume on that beating was VERY high- Thus that nice little rise on the chart- may quickly return back to the previous tested area-- and soon-- if their is less volume when it re-tests you are looking at a confirmation that the supply is being sapped out of the market and have an even stronger sign that the market is bullish.

My personal trade on this would be (without ever seeing this chart until now is)
1. I would have bought on that stopping volume bar
2. I would have been very careful to monitor the trade as it rises and lock in profits
3. If I see it starting to slide- I see that not as an "oh shit" but I expect it as a potential scenario because of the massive volume on the initial bar that tested the Support line.
4. If it DOES re-test supply line, I will wait for that test of supply to finish, if it breaks the supply line with conviction (i.e. it blows clean through the line and closes well below it with no tail when the bar closes)- I go short, if volume is less than the first test- I know it won't break that supply line and I go long.

Sledge

[firewalker]

This excellent post was made in the premium section, so I thought I'd copy it over here so everybody can read it. Thanks to cowpip.

	Quote:	cowpip
	... I read a lot, trying to understand exactly what kind of shape the economies of the world are in, but with a particular slant towards where interest rates are headed. I could care less about the drivel that analysts spout (such as the mindless automotons on CNBC). They know less about where currencies are headed than most and are probably actually better contrarian indicators. For me, price action is king, and I'll trade what I see long before I will trade what I think. I've thought for some time now that the U.K. and U.S. economies are in the dumps - and far worse is likely to come. But I have no idea when that state will manifest itself in the markets, which is why I can't trade what I think. But the fundamental slant I obtain does give me some basis to understand price action (at least longer-term price action) and it does help me anticipate major changes in interest rate policies. Yes, sometimes there is no correlation between price action and the fundamentals (as you have noted) - particularly for shorter-term swings, which is why price action always trumps fundamentals in my mind. Anyone who trades based solely off of the fundamentals is in for a sore surprise and a losing profit-to-loss graph. In the end, price action doesn't lie. It's king. It's always been that way, and will always be that way. This is why I can completely understand how you can be on the winning side of your trades so often, even disregarding fundamentals. It's also why I am on the winning sides of trades more often than not. If my fundamental analysis weighed more heavily than price action, or if I allowed my fundamental analysis to unduly bias my price-action interpretation, I would see a hole rather than a profit. It's as simple as that, to me.