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My volume analysis is telling me that professionals are very active here. That's all the blue bars. In the past the Turning Point Oscillator has been very timely at signaling market turns. It signaled the last down move which gave me a great swing trade. However the professionals didn't stop and price went back up. That puzzled me. I got more bearish signs and got another nice short on ES. The fact that the professionals haven't stopped being active tells me they're going to keep fighting to stop the rally. I know the commercials are going short based on the COT report in the previous post.
The last time the TPO signaled so much activity the ES dropped 100 points. The time prior to that it was a conslidation phase (accumulation I think) before a continued move up 65 pts. The time before that 90 pts. So when we see this much professional activity, it should lead to a big move.
I also track small option trades and they're very bullish, almost at a record.
So color me bearish. I'm going to be looking for a good setup to get short. I wouldn't be surprised if we continue testing the highs. The commercials are relatively long (even though they're net short) so it may take time to distribute all their inventory. And we need those small option trades to get the maximum bullish. And I need Tim Ord to cover his S&P 500 short. That'll be the ultimate trigger that we've topped out.
Cycle update and then I think i'm done for the weekend!
Monthly - we have a down cycle coming up (PB in downtrend) but that could be months away. October maybe?
Weekly - still in a breakout, at some point we'll drop down and get a new up cycle (PB in uptrend). Sometimes those don't work out and get a breakout of the up cycle right away. that can happen if the down move is powerful enough.
Daily - Same as the weekly
135min - Probably get our up cycle in the next few days. Same comment as weekly really.
45 min - Should get a down cycle in the next day or two. That will probably be good for a short. I'm going to be watching this one closely since my big picture bias is to the short side.
I got an email about a webinar, seems everyone wanting to sell their expensive indicators does a webinar to hook people in. This one is called the "Dow indicator".
It promises to let me win money while I'm sleeping.
81% sounds great. And I've been working my butt off for less than that. Let's take a closer look:
I didn't put the numbers into excel, I don't have time for it, but glancing over the trades and results I see a few problems:
- it didn't do well last year, which tells me the indicator could be curve fitted
- the wins seem to be decreasing with time, to around $500. That means it's depending on a high win rate which an optimized curve-fitted automated system can't sustain
- the losses are huge, many over $2k. That tells me the only way he could get it to be profitable was to practically not have a stop loss (risking $2k to make $500 is not wise in swing trading). This is a clear sign of a weak edge.
- we don't see the most important statistics: the maximum drawdown and the equity curve
Overall I'm quite suspicious. I imagine that performance will continue degrading, we don't get to see the performance for 2010. When people start complaining the vendor will explain how it's just in drawdown and they should be patient. I imagine most will give up on it while in drawdown and will end up losing $6000 or more (a few $2000 losses plus the monthly fees).
And then there's be a new indicator that will be on the website and all evidence of the old one will be gone. New unsuspecting clients will get suckered in and the cycle continues. Well that's one way to make money in trading.
Of course I could be wrong. This guy could have the holy grail. But if that were the case you'd think he could afford a professionally designed website.
No shortcuts. No secrets. Just hard work, lots of practice, determination, and motivation.
Good catch Mike. The system analyzes the 30 stocks in the Dow and then predicts the future direction of the Dow cash index. So one would expect it to work better on YM than the ES. Big red flag.
Here are my dax trades. I got two nice moves which was my plan.
However I didn't control my losses to -3 ticks and so I don't get a passing grade for today. Darn it it's really hard to control losses to 3 ticks.
The important thing is to have small losses and catch the big moves. If your wins are 3x your losses, you can be right 1 in 4 and still break even.
if you're interested in Market Profile, David has a good thread going. I just posted some ES market profile charts. Today's gap up will be really interesting. I already said I would be looking for a short and I love gap up days. I'll be looking for signs of professionals fading the move up for my cue to go short.
David - would you mind if we talk a little about ES as well as CL? Or do you prefer to keep it strictly to CL? I understand if you do. The reason I ask is cause I try to apply some of the ideas I get in this thread to ES to see if I can do it with …
I would have hit my daily goal on the first trade. One thing I have on my todo list is to analyze my trades over the past few weeks and determine a daily goal level and daily stop loss.
Also note that on the P/L page my avg win is bigger than my avg loss. I'd like to see this ratio even bigger that means cutting losses quicker and letting winners run longer. The old saying is really true.
