ES Trading For 9/17 + Rest of Week

[Dogpile]

<<Is the book by Art Collins worth reading? TIA.>>

my view is that any book that teaches you 1 good thing -- even if it just inspires thinking on your own in a new way --- is worth reading. I would say I picked up a lot more than 1 thing in that book.

it also taught me a slew of EasyLanguage tricks which you probably already know having a background in engineering.

it was just cool to see how a 30-year trading veteran thinks. I don't use very much out of it mostly because it just isn't consistent with my discretionary/price-pattern style. nonetheless -- I am trying to add another dimension to my trading and think mechanical trading might be a nice complement -- especially on the long-side.

[ant]

Dogpile, nice analysis and chart!

Today was a tough day to trade the ES. For me, there weren't too many opportunities. The break of yesterday's low seems to have provided the best opportunity (i.e., the bear flag that Dogpile mentioned).

The only thing I would like to mention for tomorrow is that trading into the bracket from where the ES broke out of (upper limit around 1523) would be bearish, and that there is virtually not volume in the ES on 9/18 between 1503 and 1512. That is a potential trade destination over the next few days if the market stays weak.

[ant]

Dogpile, thanks for your comments on the book. I perused it at amazon.com and it looks interesting. I agree with you about complementing a discretionary style with some 'mechanical trade' ideas.

[Dogpile]

re 'complementing a discretionary style with some 'mechanical trade' ideas.'

to a large extent this is what the Taylor technique is.... I have found this to be quite helpful. Just some simple tendencies to keep you thinking flexibly.

don't know if you have checked out this other thread I started but this is kind of similar to the Taylor technique

http://www.traderslaboratory.com/for...rnal-2488.html

Can see how well this works on the long-side particularly. Sometimes, the market goes up relentlessly and it doesn't work. But a lot of the time, the market does not go up relentlessly and instead chops around in step with a couple of simple indicators (I like the 2-ROC, 3-ROC, pinball, cap-pattern etc...). This 5-day one is like another one of those potentially for me. Presently the market is in unusual position so the 5-day Collins strategy is not indicating much -- but it doesn't look like a great long here to me... we went up and up and up on no volume, then went vertical on big volume. As Dalton would point out, that is not the best support structure. But eventually we will get another 5-day buy signal to think long. If it just presses up and up and up --- then I will have to rely on my scalping --- but I like to expect the Taylor type of rhythm and adjust on the fly if the market isn't confirming that rhythm.

Also, next week is one of the worst weeks of the year seasonally -- the September post-options expiration week has been down 14 of past 17 years. We could get a trend day down on one of those days and flush out all the people who bought AFTER the vertical move up.

[OAC]

Dogpile,
Have you ever read "How Markets Really Work - A Quantitative Guide to Stock Market Behavior" by Larry Connors ,who also co-authored Street Smarts with LBR ? It is also full of mechanical strategies you might want
to look into if haven't already. I believe it is self-published and only available
from his website. It is a 150-page hard cover book that sells for $25. Hmm,
I wonder why it is so cheap ?

[Dogpile]

well, I didn't have the guts to go long the low volume 'price spike' --- after the close, the market whipsawed down and would have stopped me out anyway... but 'location-wise' -- it was a good long -- maybe go long smaller size and hold for next-day value with only a 'disaster stop' -- or no stop -- was the play.

Can see in attachment an analysis for the future as it is all easy in retrospect but can see how if you break the day into two parts (the coil and then the break lower) the market did build a 'b' after the coil break lower. 50,000 contracts is a fat profile and can often mark the PVP for a day. 50,000 printed at 1531.00 so clearly there was some responsive buying going on at that level (patient buyers on weakness -- likely higher timeframe players). a 'b' is an awesome profile to find a way to be long --- 'P' is less tradeable in my experience.

posting this just as a note for the future.

[Dogpile]

initial 'structure thought' in attachment:

[OAC]

	Quote:	ant
	Welcome to the discussion OAC. I thought it was going to be followed up by an A-B-C correction.

Actually we had a larger ABC that came down from 9/19 high and the length
of A leg = length of C leg

[Dogpile]

speaking of 'ABC down'

link if thumbnail doesn't work:

http://bp1.blogger.com/_5h-SWVGx6Ms/...pport+zone.png