[Dogpile]

Considerations For Monday:

The futures closing prices on Friday were all well above their daily POC's. The afternoon trend showed no signs of sellers but note that NYSE volume tailed off during the afternoon push higher.

Dogpile Traders Laboratory

The high close sets up a potential 'pinball sell' for Monday. This set-up generally looks for a good flush down so long as price doesn't trade to a low first. George Taylors trading 'technique looks for a short-sale using location somewhere at or above Fridays high for a test down below Fridays high. Rashkes book uses a break of the opening 60-min range to trigger a move lower.

Buy programs ran on Friday for the first time in 3-4 days as seen in the 'summation ticks' indicator. Buy/Sell trading programs cycle up and down. They are always a wildcard. Fridays move up allowed the summation ticks to correct up off of extremely depressed levels.

Thus you have summation ticks cycling up but you also have a strong tendency to go touch Fridays POC. Hence, should the market trade higher early on Monday, could offer a nice asymmetric location for a short, IMO. Should the market advance on very strong volume, strong breadth etc, this needs to be respected as buy programs have potentially begun a good cycle up.

Comments appreciated...

[walterw]

Dog : now you took your posts to the next level with great visual aid... congratulations , very nice stuff and thanks for sharing...

One question: what indicator is behind the pinball formula ? thanks Walter.

[Dogpile]

Tradestation code for Pinball:

value1 = RSI((C-C[1]), 3);

its the 3 period RSI of the 1 period change.... for whatever reason, it tends to capture a day of a reversal or simply a 2-way (a candle with wicks). In either case, there is generally a trade that sets up in direction that the pinball predicts (a flush)....

keep it simple, eh?

[ckait]

Friday's afternoon rally stopped at the 38% retrace of the weeks down move could see some kind of a bounce from yhat as well.

[notouch]

The ES down move stopped at the 38 fib level which suggests last week was just a pullback in a bull market. The daily candlestick was a bullish piercing pattern. Buyers in control.

[TinGull]

Just curious...and please don't take this as a personal attack notouch...but isn't a candlestick pattern only a valid one after confirmation? That is what i was taught with candlestick analysis. I might be wrong, so if I am, please correct me.

Price stopped dead in its tracks at the 50% retracement of the move down so far. And also, looking at bi-weekly profiles there is a seemingly obvious sentiment change (to me anyways) with the POC heading a touch lower than the last profiles POC, and the value area also falling a bit. I feel its more of a sentiment change rather than a ballistic selloff because of these slighter moves when compared to the late February.

If this week again brings in lower value, at that point I'll be more confident in thinking a real change is underway rather than just a smaller "oops".

I may be completely wrong, I may be completely right. I've got no clue what it'll actually do, but that's my 2 cents on the subject.

[notouch]

Nison doesn't say it's necessary to wait for confirmation. Some traders do but some just wait for the close of the candlestick. It also depends on the strength of the pattern. A morning doji star, for example, is a very strong signal so waiting for confirmation may not be a good idea. A piercing pattern is also a strong signal, especially when it closes near the top of the previous candlestick's body. That doesn't necessarily mean the down move is over but it does point to strength ahead at least for a swing trade.

[Dogpile]

"pinball sell" worked nicely... tested up above previous day high on continuation off the strong Friday afternoon profile (trending action). hit responsive sellers during periods A-B and flushed down to 15-min 20-ema.

This first move down was potential A leg of a bigger for ABC down that would go test previous day POC... tough to look that far out though at this time...