[atto]

While not specifically related to Wyckoff or Db, I found a neat game that's fun and allows you to practice on EOD charts, if you're so interested.

http://chartgame.com/

Basically, you start with $10k and try to beat buy and hold. The chart is from an actual (liquid) stock, from an unknown time period (using daily bars). Db has mentioned before that beginners who do not have the available time to watch price live might benefit more from EOD trading. This is one of the best EOD simulators I've seen, and is darn easy to use (and fun!). I especially like it because fills are perfectly reasonable / accurate (it's buying/selling on open), and you have ample time to do your own analysis (like "real" EOD analysis).

I thought those of you who trade paper might find this interesting and insightful.

[Gringo]

Hi,

I am looking at AAPL for a possible short when/if Market (QQQQ) or Nasdaq hit R and bounce downwards.

Weekly chart has clarified quite a lot of things about why the prices are bouncing here.

Daily is somewhat confusing for me. I see lower highs and drew a demand line as well. I am taking lower highs to be a sign of weakness and am perceiving (guessing) price to not reach the R around 98 area. This to me is implying that 90 - 98 range as the place to initiate shorts and more specifically 95 to be the point to look for as a daily box has resistance around there. 90 is the midpoint from the weekly chart and could provide resistance as well.

What is worrying for shorting is that there appears to be a potential climax (selling exhaustion perhaps) around 85 in Oct 08 and subsequent tests of that level have been on lower and lower volume. This may imply lack of selling pressure.

It is possible that AAPL or market or both may just keep going up but my aim is to to develop an understanding for self-sufficiency.

After writing all this down I am not even sure anymore if shorting is a good idea.


Please add your insight as to how to approach this.

Thank you.

Gringo

[DbPhoenix]

You guys are learning this stuff so quickly. And thank you for posting to the EOD thread.

Before jumping into a stock, though, remember, that Wyckoff counseled the trader to look first at the market, then at the group, then at the stock. Nowadays, we can look at several markets (such as the Nasdaq and NDX) as well as a variety of sectors and groups before arriving at our final destination.

So, let's go from the macro to the micro, though we'll skip the market part. Everybody has the market chart imprinted on their brains.

First, technology:

Then Technology Hardware & Equipment:

Then Computer Hardware:

And, finally, Apple:

Notice how badly Technology and Technology Hardware suck. But by the time you get to Computer Hardware, it doesn't suck so bad. In fact, it's just below the '06 swing low. Apple is doing considerably better, not only above the '06 swing low, but holding at the '07 swing low. This is not to say that Apple can't or shouldn't be shorted. You've located just the spot where one could do so if that's what he wanted to do.

But keep in mind that Apple has shown considerably more strength than the groups or the sector of which it is a part, and shorting strength is not necessarily the best option.

Also compare its performance and chart position to other players in the group, like Hewlett or Dell (I haven't kept up with this, so I don't know who the major players are currently). Is it doing better, worse, or about the same?

If you do decide to short, the best place would be a failure of a test of the 95-100 area. You could also short a failure of the bottom of the box at 78 or so. But if you select that option, you've got an awful lot of support just below to look forward to, and some sort of scaling-out plan would be in order.

Understand that I'm not trying to discourage you from shorting. But it may not be clear sailing, and you need to come up with detailed contingency plans ahead of time so that you'll be prepared for whatever comes your way.

[Gringo]

Hi,

HPQ has moved up % wise quite a bit more than AAPL from recent bottoms after selloff and hence is showing more relative strength. DELL is sitting on support and is relatively weaker and the weakest of the three. I am not comfortable opening a position on a break out yet and prefer reversal at S/R and therefore am not comfortable shorting DELL which seems to be sitting at some support. Either a test or retracement after BO is the only scenario for me so far. Perhaps in time I'll develop the skill to get BO entries.

This leaves AAPL to be play with (note: It could be my own bias somehow finding reasons to just stick with AAPL and disregarding other important information).

Nasdaq and indexes are moving in such a congested areas right now that perhaps it is wiser to observe at the moment which direction the market pick.

The volume on AAPL consolidation has been steadily decreasing which may mean either accumulation or distribution in this area and perhaps buyers and sellers approaching closer to an agreement about price level. Lower highs and fact that more time has been spent at the bottom of range is somewhat indicative of distribution but it's not all clear. Had the market made a run up and started to exhaust buying pressure I would have felt more comfortable placing shorts but due to fact that indexes have recently come down might suggest some selling pressure has already been used up probability of up may be somewhat higher even though Nasdaq is under quite an R at 1500 but there hasn't been a follow through downwards either which may indicate reduction in selling pressure.

I am still observing and have become more cautious. Without Wyckoff's way of seeing supply and demand I would already have shorted AAPL around 90 and hoped for the best. Now I am atleast balancing the pros and cons while comfortably sitting outside and not terrified that I am missing the only chance in the world to short.

Thanks to those who have held my hand and helped me re-learn to walk again. The baby steps are coming along and some bumps and missteps are to be expected.

AAPL is having trouble at the Midpoint which is 90. EPS came out yeseterday so had a jump which on weekely looks like quite a rebound from test.

And I was thinking EOD will require lesser thinking.



Gringo

[MRW]

Originally Posted by Gringo »

And I was thinking EOD will require lesser thinking.

Attachment 9217

Gringo

My limited experience leads me to the observation that longer time periods such as EOD would give you more time to think, but wouldn't change the process or work involved.

Just a thought...

[Gringo]

Hi Db,

Your sector analysis and the article from Wyckoff inspired me to chose one of the weakest sector for shorting purposes and some analysis of JPM is below.

Please note GS and JPM are both behaving quite similarly.

XLF monthly clearly is in a downtrend but does seem to test montly low on lower volume. Note that the month hasn't come to an end yet.




The final box represent lack of upside strength but break above the box may imply some caution/halt on the short side. Break below the box may be a bonanza for shorts. Note also the inability of XLF Daily to rebound after this recent decline indicating a serious lack of demand.



Most JPM analysis is done on the chart itself for easier view.

[Gringo]

It's around 2 mins before close and JPM looks like it has weakned based on the close not getting too high and price again coming down and stalling after 25 area.

Seems like a resonable opportunity to short as market rejected major resistance and XLF also couldn't get out of the most recent box and reversed after all the gains today.

[DbPhoenix]

Originally Posted by Gringo »

It's around 2 mins before close and JPM looks like it has weakned based on the close not getting too high and price again coming down and stalling after 25 area.

Seems like a resonable opportunity to short as market rejected major resistance and XLF also couldn't get out of the most recent box and reversed after all the gains today.

Where do you plan to short, i.e., what price?