YM, ES and DJIA Analysis

[atto 20]

I'd love you guys to give your ideas/feedback on my thread over in Market Analysis.. the more opinions / analysis, the better .

 

http://www.traderslaboratory.com/forums/f2/a-case-for-a-mid-term-4173.html

[firewalker 10]

It's been almost a month since someone posted to this thread, and I hate to see it go down under

 

I've deliberately chosen not to use trend, support or resistance in this example. Just to show that just observing price action (and volume) you can get a very good clue of what the market's intentions are. This is from last Friday, August 08, DOW e-mini, 5-minute candles:

 

(1) If price caught you off guard at the open (moving up 200 points in a good 30-minutes, there was at least one possibility to get aboard later on.

 

Keeping in mind that price has already traveled the average daily range, I think it's important to keep expectations in check and not expect the market to move another 100 points just because we want it to. Then again, price can move further than what seems rational.

 

(2) Unless you are paying attention to volume, you would've entered long at 'A', on what looks like a breakout of the converging triangle. And somebody with a wide enough stop would have gotten away with it. But not me, because I wanted to see continuation straight away. If price doesn't move, I'm out. I prefer to take a small loss than sit tight and hope.

 

(3) 'B' was the definite entry, confirmed by volume. Notice how the attempt to move higher at 'A' gets rejected immediately. Not so at 'B', volume takes off completely and price makes another push higher about one hour later. All of this requires patience obviously. And lots of it.

 

(4) After that price makes Higher Highs and Higher Lows, but momentum seems to take off. Given that it's a Friday and price has already made a run for almost 350 points, we realize that the first sign of trouble should make us run for the exit.

 

(5) 'G' is still a higher low, but selling pressure comes in near 'H'. Look at where the candles close and look at the volume. We fail to make a high above 'F'. With less than one hour till the close, I'd definitely scale out here. If we break below 'G' the last swing will be broken and if you didn't take some profits at 'H', you'll want to do so at 'I' (giving back 50 points though)...