The Downsloping Trendline On The YM

Bfbusa · February 7, 2007

This is an updated thread of an earlier one I posted in Dec. 2006 " The intraday trendline".

Although the same can apply to ascending lines, this post is dedicated to the in intraday descending trendline that have appeared on the YM chart and is tradeable on the short side. All charts are the 233 tic.

I have seen these trendlines stop a pivot or other technical reversal dead in it's tracks and is a good place to take your first partial and bring your stop to break even if your long.

The strongest lines are the the ones that begin in the previous day and continue into the next day. The first chart shows a downtrend line that started around 10:15 AM on 2/04/2007 and chart 2 shows a continuation into the next day 2/05/2007.

In chart number 3, here is the same day 2/05/07, later that morning the YM finally broke out only to form a new desending line. Notice how the YM just can't get above the line.

In chart number 4 here we see a downtrend line form at the 61% fib retracement. Again the YM has a very difficult time getting above this downtrend resistance.

And even when it finally does break thru, the resistance line isn't really broken......it's just moved a little. Chart 5.

In conclusion, I have found this trendline phenomenon to be very useful when used in conjunction with the tape, pivots and or other technical signals, when going short or setting targets on longs. I have also found this to be useful on days when reading the tape has been difficult. Around holidays and during " lunch hour".

OK, feel free to post any thoughts you may have. Good trading.