[james_gsx]

Notice how the candle couldn't break the low of the shooting star, and had less volume. It has to make you wonder if it could be a bull trap, I think watching the rest of the week would be a good plan of attack, and be ready to exit any short/long position.

GDP numbers are released tomorrow, pay attention to that.

[brownsfan019]

Good points james. If one was short and still short on the shooting star, tomorrow is an important day as you noted, the low has not been violated. An aggressive short should still be short in my opinion and a conservative short was probably trailed out.

[james_gsx]

I finally got tradestation installed and ready to go

Looking at the charts that were formed today I noticed that we still fit inside a wedge. But there are definitely some things to consider. Depending on how you draw your trendlines for the Nasdaq, the naz could be a leading indicator. Before all of this started, the Nasdaq was being used as a leading indicator by John Carter. I no longer use his service and just rely on myself, but it would be interesting to know what he's looking at.

I wanted to make sure I was looking at the big picture here too, so I looked at the weekly charts. One thing stood out, on the Dow, Naz, and S&P we are forming a (hammerhead?). But we are not breaking any form of resistance, and I still think the candle could mean something significant. I have too many images to attach so I will just post them via imageshack.

Let me know what you think Brownsfan...

[james_gsx]

One other thing, I know this is possible and maybe you can point me in the right direction to start searching. But how can I figure out where the majority of the volume was traded? Can't you use market profile for something like that? I believe it could help figure out who was in control and where.

[Nick1984]

A volume histogram should show you what price the most volume was traded at. Is that what you're referring to?

[brownsfan019]

James,
I'll try to dive into these charts over the weekend. I would have last night, but had a poker game to get to.

The analysis looks sharp though, good detailed work!

[brownsfan019]

James,
Let's take a look at your NAS daily, weekly and DOW daily, weekly.

NAS DAILY




We have an interesting formation on the NAS daily, right at the 50 SMA - a spinning top. The spinning top by definition is meant to show a pause or break of action since there was no decisive winner between the bulls and bears. It can also show a possible exhaustion of the current trend as well. Result - possible short to play based on the short-term trend as up AND using the SMA as a possible resistance zone.

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NAS WEEKLY




The weekly shows a very different picture. Here, we had a hammer 2 candles back that pierced the SMA but could not close below it. Depending on how you play that hammer, you should be long by now. Since the first major red hammer there, we then had a very bullish white candle and then followed up by another bullish hammer. Note the lower shadows of those two candles came close to testing that SMA zone again. Result here is that you should be long, although it has not been an easy long to maintain.

========================= ================

DOW DAILY




The dow daily is giving an 'ok' bearish formation near the SMA. I'm not in love with this possible short, but there's definitely a possibility here to go short based on the shooting star at the SMA. Similar setup the NAS, which if nothing else, should give some additional confirmation.

========================= ================

DOW WEEKLY



Dow weekly resembles the NAS weekly - should be long based on the red hammer 2 weeks back and again, should be holding long, but it's been a grinder to get into profit.

========================= ================

It's not surprising to see the charts similar, which is good for an overall feel of the market. If playing these current short possibilities on the daily, the NAS looks like a better risk/reward setup. I'm just concerned that it actually broke the SMA and looks like it closed above. So, you get a better return on your money if the short works, but I would not be surprised to look back and see a failed short a few days from now.

And it all boils down to if your entry criteria is even met to begin with. For anyone reading assuming I would be shorting first thing Tue, I suggest you read through all the Steps that I have outlined in the forum. Just b/c a bearish signal appears, does NOT mean I would initiate a short at the onset of trading Tue.

[brownsfan019]

Originally Posted by james_gsx »

One other thing, I know this is possible and maybe you can point me in the right direction to start searching. But how can I figure out where the majority of the volume was traded? Can't you use market profile for something like that? I believe it could help figure out who was in control and where.

Good question, but not sure I can answer... I would check out the market profile area here on TL or even email tradestation and ask.