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cunparis weekly S&P 500 Outlook

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  #1 (permalink)
 cunparis 
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Previous forecast was here:

From now on I'll post them into this thread. Last week I said:


cunparis View Post
My outlook for this week is that we move lower, however an attempt at the recent 923 high is possible. This would surely push all indicators into oversold territory and possibly even form bearish divergence making it an ideal place for adding to short positions. It could also form a rather complicated H&S Pattern with two shoulders on each side, with a high of 923 for the shoulders and the neckline around 890, another place to add short positions.

Last week's outlook was pretty accurate although I admit everything happened faster than I had thought. Normally the two days before July 4 are bullish, so that makes me even more bearish.

My indicators are bearish and are approaching oversold but are not yet very oversold. During a downtrend the oversold indicators are not timely so we should be paying attention to the overbought signals. This means the market could give a small bounce up or could continue down pushing the indicators further into oversold territory which is normal for a bear market beginning.

The next few days are key. After a big down day like Thursday we should have continued selling. If however the next day or two remain flat or advance, that means there is demand. This demand could be enough to push the market up towards 920 or it could be just enough to cause a pause in the downtrend. Any considerable move up on increased volume will likely point to a move back up to 920.

I'm still short ES.

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 Prtester 
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cunparis View Post
Previous forecast was here:

From now on I'll post them into this thread. Last week I said:



Last week's outlook was pretty accurate although I admit everything happened faster than I had thought. Normally the two days before July 4 are bullish, so that makes me even more bearish.

My indicators are bearish and are approaching oversold but are not yet very oversold. During a downtrend the oversold indicators are not timely so we should be paying attention to the overbought signals. This means the market could give a small bounce up or could continue down pushing the indicators further into oversold territory which is normal for a bear market beginning.

The next few days are key. After a big down day like Thursday we should have continued selling. If however the next day or two remain flat or advance, that means there is demand. This demand could be enough to push the market up towards 920 or it could be just enough to cause a pause in the downtrend. Any considerable move up on increased volume will likely point to a move back up to 920.

I'm still short ES.

Just to understand a little you are swing trader?, which chart you use to trade?, how long your typical trade last?

Regards

Jose

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 cunparis 
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Prtester View Post
Just to understand a little you are swing trader?, which chart you use to trade?, how long your typical trade last?

Jose

Hi Jose, I do both swing trading and day trading. I use a similar technique except for swing trading I use a lot of breadth data (put call ratio, advance / decline line, COT, etc.). For swing trading I use mainly weekly & daily charts, and sometimes a 1 or 2 hour chart to pinpoint entries. I'm looking for trades I can hold for 1 or more weeks. I'm current short ES from the June 19.

I'm currently working on backtesting some of my indicators and fine-tuning them. I want to post some in the future. All my indicators are what I call "non-standard" indicators. I don't have any MACD, moving averages, RSI or anything like that. I've written most of them myself.

So in the upcoming weeks I plan to share and show some charts. I want to trim down my charts first and see if I can prove some of the ideas. That's what I'm working on now.

For daytrading I do not scalp. I look for 5 ES trades/day around 2-6 pts profit and 4 point stop. I look at Support & resistance, volume & price to pick turning points. Same for swing trading really.

I use tradestation so the indicators I post will be for TS but they could exist for Ninjatrader or even be coded up.

Thanks for your questions.

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 Prtester 
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Thanks for the additional info :-)

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 cunparis 
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Just wanted to post an update.

Yesterday's price action wasn't that good for the bears. We ran into demand around the H&S neckline and I got bullish divergences. My guess is the buyers waited for it to penetrate the neckline to bring in shorts and get longs to cover before they stepped in to defend the neckline. Also sellers are taking a pause to allow prices to go higher so they can start the selling again.

Everything points to a bounce so today I covered my position and I'm flat. I'm going to wait for a bounce on weaker volume and hopefully bearish divergences and I'll go short again. I expect the next short to carry through the H&S neckline and down to the target. I really debated covering or just sitting it out. But too many short term bullish conditions for me to sit it out.

I don't really intend for this to be a journal, the most important thing for this thread is for people to participate. So let me know if you're long, short, or flat and why. It can be on simulator or real money whatever floats your boat. The important thing is to trade and share ideas.

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 cunparis 
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2 weeks ago I gave downside targets of 875, 820, and 807. We passed the first target this week however ran into support which suggests a pause in the downtrend.

An update on the H&S pattern. The neckline can be drawn in two places, the usual is between the shoulder lows. The break of this neckline was not on high volume which is not a good sign. A pullback usually occurs after a break of the neckline which would be around 895. However 885 which is the low of the right shoulder is acting as resistance.

The second line is a horizontal line below the left shoulder at 872. Price briefly went below this line but closed above it on high volume on Wednesday. This shows there is support at this price. However the last two days were on lower volume which shows there was not a lot of follow-through of the demand.

2 weeks ago we had a bearish outlook (5 bearish and 2 bullish signals) which predicted the recent move down. This week we have 6 bullish signals and 1 neutral. This indicates a move up is very likely. The target for the move up likely to be the gap between 918-908.

However the weekly chart is still bearish so the long term trend is down and any move up will be an opportunity to establish or add to short positions.

I'm currently working on formulating my indicators (around 5 on the weekly and around 9 on the daily) into a single indicator to simplify things. It takes me a lot of time to analyze them all each week. If I put them into a single indicator then I can backtest it and see how it works and post simple charts.

Unfortunately I'm leaving for vacation this week and will be gone for 3 weeks. So it'll probably have to wait until my return. in the meantime I'll try to post weekly updates.

Here is a daily chart showing the H&S lines, the gap, and the bullish divergences. The indicators are Better Volume which color codes volume based on the range and direction, Klinger + ATR which uses volume to weight a price indicator momentum indicator. It's good for divergences. Below that are Kase KCD & PO which are price based and show momentum and therefore divergences.

Klinger + ATR is showing a bullish divergence (marked by the right arrow on the chart) and the Kase KCD is showing two bullish divergences (marked by red lines and also the two blue arrows). The Kase PO is longer term and is showing momentum has not yet penetrated to the bottom side. These all point to a pause in the downtrend at the least and a move up at the most. Combined with my other indicators I'm quite bullish for this week but not enough to go long because that would override the long term outlook from the weekly chart.

I am now flat, waiting for the pullback (possible formation of a 2nd right shoulder) to go short again. Downside targets are 820 and 807.

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Enjoy your vacation!! Just forget about the markets!



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  #8 (permalink)
 cunparis 
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The previous H&S pattern has been invalidated by a Sign of Strength through the neckline. It’s possible we’re forming a 2nd right shoulder (there were 2 left shoulders) however the pattern is very asymmetrical and most would probably not consider it a H&S pattern. Whether this is a H&S or not is mostly irrelevant because the new neckline forms horizontal support just under the lows, in the range of 864-872.

Last week we have 6 bullish signals and 1 neutral which predicted the move up very nicely. The estimated target was the gap between 918-908. The market gapped up into this gap and continued upwards on decreasing volume. Gapping up through a gap is an interesting occurrence because on one hand it’s bullish but on the other the resulting gap is likely to be filled which is bearish.

All indicators on the daily chart are bearish (except the PC Ratio which is neutral), with many having turned down from oversold levels. This creates a bearish outlook for this week. The target is a fill of the gap at 903.50.

The weekly chart is just slightly bullish so the original downside targets around 800 are put on hold. The next few weeks are key.
Possibilities:

The market continues higher, despite the oversold levels.
This week is a small pullback due to the market being oversold, and then the market then continues higher to challenge the current top around 950 (the outlook there will depend on price action, depending on whether we have a breakout or a double top).
The market continues heading lower forming a H&S pattern.

In my opinion the first isn’t likely. So this week’s outlook is very short-term while we wait for more clues for the longer term.

I went short this week with a partial position, this was a bit pre-mature but I'll be looking to add to my short position depending on the price action on Monday.

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 cunparis 
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Last week the charts were bearishly positioned with most indicators down, however the weekly chart was “slightly bullish” which caused some confusion and resulted in a neutral outlook. I listed three possibilities and the market took the “unlikely” choice of continuing higher on increasing volume showing good strength. The fact that it was able to do this despite the bearish and oversold indicator levels was very surprising.

The question now is: Are we in the second stage of the rally or a parabolic blowout end to the bear market rally?

It’s too early to tell. Several indicators turned down and then turned back up and have the potential to make bearish divergences which will need to be confirmed by price. This week’s outlook is neutral while we wait for such signals. The market is too extended to chase it with a long, and with a bullish weekly and daily chart it’s too early for a short.

I'm still short and in hindsight I should have waited for more of a confirmation before adding to my short position. Wednesday looked to be a reversal day but the market reversed and went higher towards the close. I was too early and now I'm in an uncomfortable position of waiting for more clues while holding a losing position!

An aside:

I've been bearish on the economy and the market for a while now and this bias has affected my ability to objectively study the charts. As an example, a few weeks ago I knew the daily chart was bullish so I covered my shorts. But I didn't go long, because I "thought" the weekly chart was still bearish. Was it bearish or was it my personal bearish bias influencing me? In studying it now I think it was the latter.

Which is oddly enough why I decided to start this weekly analysis (privately, before sharing here) in the first place. It was to help me with my own trading and to force myself to form my outlook on the charts instead of my own personal beliefs and biases. Then I thought if I were taking the time to write it up, I would like to get some comments and opinions from others. I'm still hoping this will be the case and I hope others will participate, if nothing else to let me know if I should continue or not.

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 cunparis 
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Big Mike View Post
Enjoy your vacation!! Just forget about the markets!

Now I wish I had followed your advice.

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 cunparis 
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Last week we had a neutral outlook while we waited for more signs from the market. This week we continued seeing bearish divergences and several indicators turned down. 6 indicators are down and 2 are up, with the 2 up having recently formed bearish divergences and could be continuing to do so. The biggest signs this week are the bearish momentum and HVC right at the broadening top line which happens to fall at 1000, and the swing system remaining short. Thus the daily chart is extremely bearish and this is a good low risk short entry point with a stop on a close above the broadening top line (around 1000) or above the 1016 Fibonacci level.

Longer term the outlook is very bullish, mostly due to the large commercial traders buying. Normally I don't go against the long-term outlook but having missed the current move up is making me re-think this. So we have a short-term bearish signal and a long term bullish signal. Let’s see what the choices are:

1. The market corrects down to the middle of the broadening top around 930 and then continues upward for an upside breakout of the broadening top with a target of 1126 which is a 50% retraction of the bear market. This scenario is consistent with a bearish short-term view and a bullish long-term view.

2. The market continues upward. This is unlikely but the entire move up has been unlikely proving once again that anything can happen. The commercials have enough buying power to continue the rally to the 1126 target.

3. Commercials start selling and push the market down to the bottom of the broadening top formation at 860.

This week should tell us which of the 3 will happen.

I added to my short position on Friday and if this week starts out bearish I'll be looking to add a bit more. If we move up with higher volume I'll cover. Currently short with 1/2 position.

Finally, I have combined some of my indicators into a strategy which gives buy/sell signals. It still needs some work but I plan on sharing some charts and signals when I get back (if there is interest). The long-term systems are currently long and the short-term systems are currently short.

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 cunparis 
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I didn't write about this in my last update but one thing I'm watching is the intermarket movements. Specifically the dollar. The dollar has been inversely correlated to the indexes, oil, gold, euro, etc. The dollar is currently in a retractment and many including myself expected it to resume its move up. This week it broke through support but from what I see this has the makings of a fake out. I was expecting the dollar to move up and the indexes, oil, gold, and euro to all move down. When the dollar broke through support many expected it to continue down and the others to continue up. In any case this presents a major market turning point and one way or another we should get some clarification really soon. The past couple of days the dollar has stopped going down. It's working on completing a 5th wave down which is usually the final wave. If my theory is correct, the dollar could be finishing the move down, going below support as a fake out. Traders are going short on the dollar and their covering could fuel a rally. It's really interesting that the dollar is just under support right as the indexes are just above resistance. And in both cases momentum is decreasing.

I read in another thread a criticism of a well-known trader's newsletter where the guy called the top (or bottom) several times but was wrong. The critique was that the guy didn't know what he was doing. I thought it was funny because with a $1k stop one could call the top wrong many times and eventually be right and make a fortune.

Finally, it seems everyone here is more into scalping than swing trading so I'm not sure I'm going to continue posting to myself. I was hoping for some participation and exchanging ideas.

My theory is this:

- scalping - provides income while waiting for day trade setups ( I only get a few setups a day and sometimes they're open to close so lots of time for scalping)

- day trading - main source of income

- swing trading - a way to invest the income from day trading

To me they all fit together and work to spread out the risk. Obviously if you have a small account then it's best to focus on scalping and/or day trading to start building up the account.

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 Prtester 
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cunparis View Post
Finally, it seems everyone here is more into scalping than swing trading so I'm not sure I'm going to continue posting to myself. I was hoping for some participation and exchanging ideas.

I read your post each and every time, but sincerely, dont have much time right now to sit down and give something in return, but I hope soon I can.

I wish I could do some swing trading but my trading account and my confident in my skills are a little reduce at the moment, so need to limit myself to daytrading :-) . Your outcome is always appreciated.

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 cunparis 
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I read your post each and every time, but sincerely, dont have much time right now to sit down and give something in return, but I hope soon I can.

I wish I could do some swing trading but my trading account and my confident in my skills are a little reduce at the moment, so need to limit myself to daytrading :-) . Your outcome is always appreciated.

If it's just a question of money you can do swing trading with a sim account or excel. If it's a question of time then it's probably better to focus on daytrading or scalping.

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 Peter 
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I read your posts, pls. keep them coming.

Think we are in the same camp regarding the dollar.
IMO the dollar will be key in the start of the decline. The dollar is due for a (last?) bounce, and then stocks and commodities should start to go down.
Also we are getting close to a time fib window (mid Aug- mid Sep) for the decline to start.
But I would not exclude the chance for first only a small correction and a last push to 1050-1100 in the next month.

BTW A good point about the various forms of trading. Makes a lot of sense.

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 Prtester 
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I see you follow some kind of Elliot Wave, which count is close to your own

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 Peter 
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Why not another count ? A big ABC correction of the previous bull markets?

The whole downturn up to March being Wave A down.
March - Oktober? wave B correcting part of the decline with potential target 1020 (38% retracement or even 1150 (50% retracement).
This would place us now in the last part of the subwave c up (after a up (March-July), b down (June), c up (July - ?) .
Then end this fall - mid next year a big drop in Wave C to below the March lows.

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 cunparis 
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I thought this was interesting to share. Paul Tudor Jones is one of the few "wizards" who is still active. He just sent out a letter to his shareholders. His assessment sums it up well for what I believe.

CNBC Stock Blog ? Investor Letter: Paul Tudor Jones? Market Outlook ? CNBC.com Investing News - CNBC Stock Blog - CNBC.com


Quoting 
In its market outlook, the firm takes the view that the run-up in stocks over the last 100 days is a “bear market rally.”

“The bottom line is that we are not inclined to aggressively chase the market here,” the firm said in the letter.



“Rather, we eye a better opportunity to be long equities into year-end on a potential autumnal pullback.”

If this is a bear market rally why is he looking for a better opportunity into year-end for going long? That doesn't make sense to me. My guess is he says that to calm down his investors who feel they're missing out, that or he may see a low-risk opportunity to trade the bear market rally after a pullback.

Here's what I'm watching: The COT report. Commercial traders have been buying for many weeks until last week when they were net sellers for the first week. However the commercial SPX traders were still buying. We're at resistance from the broadening top and the 38% retractment level of the bear market (1016 on ES). If commercials continue buying we will head higher possibly to the 50% retractment and the 62% level. However if the commercial traders start selling that will cap the rally and we'll head down. This is all long term of course. Tomorrow's COT report will be very interesting. Was last week's selling just a pause? or are the commercials switching sides?

For the wave count: I've been lost and confused trying to apply it to the S&P. I don't really use this in my trading except to predict the end of a wave 5 or a C correction to try an anticipate turning points. My trading style is countertrend so I look for reversals. I'll have more time to study this on the weekend.

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 cunparis 
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cunparis View Post
Thus the daily chart is extremely bearish and this is a good low risk short entry point with a stop on a close above the broadening top line (around 1000) or above the 1016 Fibonacci level.

I haven't completed my analysis for this week but there are some interesting developments. Today gapped up but closed in the middle on higher volume, this indicates supply. The high of today on ES was.. 1016! Exactly the 38.2% retractment level of the bear market. A couple more interesting developments: Commercial SPX traders were net sellers for the 2nd straight week (after being net buyers for the previous 6 weeks). And the Dollar seemed to find support and went up on higher volume.

All this points to a major turning point across all markets. The dollar could be resuming the uptrend, the indexes could resume their downtrend, commodities especially oil & gold could head down (partly due to a rise in the dollar but also due to market factors).

I've been waiting for this moment for a while now so I'd like to see some more confirmation but I see very good low risk setups across several markets. As an example, a short on ES with a stop on a close above 1016 on higher volume or around 10 pts with a target of 940 (50% retractment of the current leg up and a possible target of 860 which is the bottom of the broadening top formation). That's 10 pts risk for a potential 76-156 pt gain. I don't think they get much better than that.

I added to my short today and will be ready to add more if the next few trading days look bearish.

Let me know what you think!

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 cunparis 
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Sorry but I didn't have time to do my usual weekly analysis. Not that I didn't have time to post it, I didn't do it at all. Been too busy working on a swing trading strategy. However my previous comments are still in tact. Just about every indicator/breadth/data/analysis shows we're overbought with bearish divergence. It's just a matter of time before the indexes come down hard.

here's the S&P 500 McClellan oscillator & summation index. I can't put the S&P on the chart due to a stupid tradestation limitation. But you can imagine. Major bearish divergence here. so we just need a good confirmation. I'll be looking for a low below 990 and then a high below 1016. This will be a sort of H&S pattern. Of course the drop could be real sudden so we can't count on having a bearish price pattern..

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 cunparis 
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I'll be looking for a low below 990 and then a high below 1016. This will be a sort of H&S pattern. Of course the drop could be real sudden so we can't count on having a bearish price pattern..

1st chart:
We hit 990 which acted as support. Bears would like to see this small support taken out and the bulls would like to see it hold. The market is oversold and due for a bounce but may go a bit lower first. The bounce could stop below the 1016 setting up a reversal pattern with an lower low and then lower high. Or it could be setting up an ABC correction pattern. In my chart I have a few possibilities both stemming from the same correction, a bullish option and a bearish option. I'm trying to predict less and go strictly on what the charts are saying. That's not easy to do. It's easy to have a bias and let them affect the interpretation of the charts. If the bias comes from a higher timeframe then it's ok, but if the bias is misinterpreted?

2nd chart:
This is a an indicator I use to interpret the COT data. There is a stochastic of the large commercial traders' net position. You can see the larger trend is up but over the past 2 weeks it has went down. They are powerful enough to move the market. They could be selling to stall the rally and push it down where they could then start buying again at a better price. The new buying could been sooner or later. If later this could be the start of a selling campaign that would drive the index towards the bottom of the current chart pattern (broadening top). Or they could just be taking a pause before the summer vacation period and before resuming the uptrend. This week will give some more clues.

So how do I use this? The COT gives me the most likely direction and I don't like trading against the commercial traders. However interpreting it is not easy. You can see in June the commercial traders were selling and then suddenly started buying. That buying was one criteria that told me to cover my shorts (see previous posts). However after that the daily chart was bearish and I went short against the commercial traders which was not a good idea.

If I get the direction right then that helps me to interpret the daily charts. Here we have a long term bullish on the COT but short term bearish. On the daily chart above we're in a broadening top pattern and just came down from a key 38% retracement level of the bear market. Add in a bunch of overbought indicators showing bearish divergence and the short term seems bearish. An increase in commercial buying would change that.

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 cunparis 
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I see you follow some kind of Elliot Wave, which count is close to your own

Arthur Hill gave two possible wave counts in his last update so I thought I'd share them here. I'm not that big on Elliot Wave cause it's very subjective and difficult to do in real time. For example, compare his A-B-C of the 2nd chart to my second chart in the previous post. The two are compatible because they're on different timeframes. But therein lies the challenge!

He presents two possibilities, one bullish and one bearish. As of right now I have more confidence in the bearish version but that could change depending on the commercial traders and the price/volume action when everyone is back from vacation.

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 cunparis 
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A coworker asked me if in the first chart I used fibonacci for the levels in the lines I draw on the chart. One could use fibonacci extensions & retractments for that and an excellent book on the subject is Rober Miner's book

Amazon.com: High Probability Trading Strategies: Entry to Exit Tactics for the Forex, Futures, and Stock Markets (Wiley Trading) (9780470181669): Robert C. Miner: Books

However it's quite complicated and time-consuming without his special software ($$$) so I didn't do it, I just draw them on to indicator the general idea. Miner's approach is good for anticipating these levels. I recommend the book even though I don't use this in my trading.

Also, on Tuesday's close my mechanical swing trading strategy went long. I consider it to be pretty reliable in general but the last 2 trades were stopped out so the current market is quite uncharacteristic so it might be as reliable as it has in the past. I decided to override the signal and I'm staying short as long as we stay under 1016 on ES with bearish momentum. I will write more on all that in the future if there is interest. By interest I mean people participating in the thread!!!!

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 Peter 
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I don't trade on EW counts as I try to follow the intermediate trend. I did follow EW years ago and had Prechter's newsletter, but that cost me lot of money .... the letter and even more the trading results.
But EW is interesting to try to anticipate the broader picture and gets me mentally prepared for trades along the intermediate trend.

Re the Hill charts my preferred count is the ABC scenario. An ABC reaction on the impulsive drop from October makes more sense to me. For me we are now in the last part of the C leg which subdivided in a smaller a,b,c. With 'a small' finished, now in small pullback 'b small' and one last final push to come in 'c small' to 1050ies.
But we might truncate here and start a real decline.

Counting the rally as 1,2,3,4,5 looks less likely to me. It would make it a real huge rally as the 3 leg should be the longest.

But who knows what will happen, there is so much interference in the markets now with the primary FED dealers getting billions over the last weeks (becoming even lot more billions after they to their reserve multiplier trick) of freshly created dollars from outright treasury monetization to play with. They can move anything with this and by controlling most of the brokerage and 'legally enabled frontrunning' via their High Frequency Trading computer parks they will use every trick to take their customers to the cleaners.

Still some of these outright treasury purchases to come next week. So my best bet is ... with that ammunition it will be hard for the market to drop. Or maybe the big banks will buy shorts for that money ... then extra hard down.

I guess we just have to wait a play he trend. Picking tops can be deadly for your account. I learned that lesson in the past

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 HJay 
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Cunparis. I found a very nice indicator on Ninja Forum that automatically sets the Fibonacci Levels. I have attached it if you are interested.

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 cunparis 
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HJay View Post
Cunparis. I found a very nice indicator on Ninja Forum that automatically sets the Fibonacci Levels. I have attached it if you are interested.

Can you post a screen shot? Sounds interesting.

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 HJay 
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Ok.. here it is in action today... By the way this is the indicator that is part of the attachment I sent in the previous note..

HJay

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 cunparis 
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The S&P is right in line with the possibilities I posted previously.


Quoting 
The bounce could stop below the 1016 setting up a reversal pattern with an lower low and then lower high.

.

I previously said I was looking for a lower low (below 990) and then a lower high. It looks like we might have had the lower high but I'd like to see a 2nd lower close to confirm that.

I'm attaching an updated chart (I haven't moved my drawn-in lines). It happened quicker than I expected which always makes me stop to see if I missed something. I'm also posting a zoom in of the last few days. I've indicated selling volume with a red arrow. What is selling volume? First the white volume bars are down climax bars which is basically a move down on higher volume. Then there is a high volume bar that I marked on the chart with the text "selling volume". When the market makes a new high (or retests a recent high) and closes in the lower half, it's most likely due to supply which we call selling volume. You can see this happened on both highs (8/7 & 8/12). On 8/13 price closed towards the high, that's showing demand which is buying volume. However the volume was much lower that day which means there was more of a lack of sellers than an abundance of buyers. The next day the sellers returned.

So now that we have an idea of what's going on, time to ask who's buying and who's selling, and then decide which side we want to play.

Friday's COT report was interesting. The net position of all commercial index traders went down, which has happened for several weeks now. I particularly follow the SPX commercials who actually bought a bit this week but that is offset by the emini commercials who sold as well as the other index traders. If the SPX commercials had sold as well I'd be much more bearish. But as it is the commercials are selling for several weeks straight and this a strong indication that the rally is over.

So now we know who's selling, who's buying? Every week I do an analysis on the dumb money. If the commercials are the smart money, the small options traders are the dumbest of the dumb money. Right up there with the Rydex leveraged fund traders. These guys are buying the rally like crazy. We can see that in the COT report as well, the small trader category is buying it up.

So we have a multimonth high and the smart money is unloading their shares to the dumb money, at the top of a broadening top formation, at exactly 38% retractment of the bear market.. could it get any more bearish?

Well yes it could. I'm also watching the dollar, crude, and oil. The dollar broke through a critical support level but it appears to be a false breakout and now the dollar is in a small bounce. If the dollar breaks the last swing high at 79.81 then this is bullish for the dollar. And since the dollar and the indexes are inversely correlated, that's bearish for the stock market. The COT report shows the commercials are supporting the dollar and selling gold & oil. Everything points to a major turning point across all markets.

Finally, I've been working on combining my favorite indicators into a mechanical system to make it faster & easier to interpret. When I say indicators, I mean breadth indicators and not price indicators. So far I have 3 individual systems, one flat, one short, and one long. This weekend I managed to combine them into a single system so that I can trade it. It is short. I'm still working out the details but so far the results are pretty good.

As for a target, the first one would be a 50% retractment of the rally which is 940. Second targets would be 928, 900, and 860 (bottom of the broadening top).

I hope you found this useful, let me know if you have questions or comments and most important let me know what you think. I wish I could post more charts but I don't have much time so if anyone has any comments if you can post a chart with your comment that would help everyone.

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 cunparis 
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The combined COT report for all indexes showed the commercials were pretty much unchanged from the prior week. The prior weeks before that the commercials were selling. The explosive rally on Friday suggests that the commercials may have started buying and the smallest traders selling gives the idea credibility.

I was trading ES and CL at the time of the breakout. I was short ES with a stop at 1017, thinking a stop 1 point above resistance at 1016 should hold. The breakout was so fast price shot up to 1020 in just seconds. Took me a while to figure out what happened. Good thing I had my stop. The resistance had held for a while and you could see price chopping away at it. When resistance finally broke there was a vacuum of sell orders and that's how price just blew through it. Amazing really. And totally unexpected. The volume was average so there is still a possibility that it will fade out. Most gaps are filled so the gap at 1007.75 would be the first target if price pulls back. If the rally holds then I don't see much resistance until 1200.

In my chart you'll see the price roughly followed my outline with the exception that I underestimated support at 980. I thought price would drop to 953 before bouncing up. Looking closer at the chart, in hindsight, I see that the high volume on support at 980 was buying volume and I think one could have determined that at least a little bounce was due.

I'm going to be looking for a confirmation on Monday, meaning increased buying on increasing volume. Or a pullback to fill the gap.

For my mechanical systems, my main trading system stopped on Friday and then went short again at the close. The three individual systems that make up the main system are long, short, & short.

Have a good week.

PS: The dollar is still in a trading range and have still shown commercial support. In my opinion the fate of the dollar is critical for the indexes. A breakout of the dollar will likely stop the index rally and a breakdown will likely signal a continuation of the rally. So while the indexes have broken out, the dollar hasn't broken down. This discrepancy must be resolved as the two are very negatively correlated. Of course this correlation could stop at any time without notice. Otherwise it'd be too easy.

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 cunparis 
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Due to lack of activity and me being busy on other things, this week's outlook is going to be very short. Basically I don't have any idea what's going to happen!

The commercial traders started buying again. Small traders are buying. Speculators are selling. I like to see the commercials and small traders going in opposite directions and so far that's not happening.

As far as price action, it seems we're in a minor pullback here which has mostly been a pause and moving sideways. This is most likely due to the low volume of the late summer. Next week should pick up a little but we probably won't get any big move until after labor day.

I'm watching the dollar. Commercial traders resumed their buying spree on the dollar, which is holding it just above support. The commercials are very much engaged in supporting the dollar and I'm betting on an upside breakout, which will probably signal a top in the indexes if the current negative correlation holds. Gold & oil commercials are very bearish positioned so it all makes sense. We just have to be patient and wait for it to play out. Which could be after labor day. September is also a rollover month and is sometimes when the market will turn. I've read that some long term cycles are due in October but I haven't investigated that so I really don't know much about it. But I do know that October is typically not a bullish month. So again, everything makes sense for a top between now and october.

So if that's the case then why are commercials buying? It could be one last bull trap, who knows. This is the part that's puzzling me.

Have a good week.

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 cunparis 
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cunparis View Post
Most gaps are filled so the gap at 1007.75 would be the first target if price pulls back.

the dollar is up today and that could be why the indexes are down. I read on bloomberg that if the dollar goes up the traders have to sell their securities held/purchased with US dollars to avoid losing money on the dollar. That makes sense and could explain one reason why they're negatively correllated.

We're very near the gap, the question is now will it be filled or will it act as support. Stay tuned.

Also, I started a thread on using volume:



So far it's geared towards intraday however everything applies to larger timeframes including daily & weekly. Check it out if you're interested. For example, when I say will the gap hold as support, I'll be looking at the volume for clues..

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 cunparis 
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I posted a daily chart in the Volume thread with a little analysis based on the volume. Looks bearish to me.

https://futures.io/5338-post30.html

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 cunparis 
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cunparis View Post
Basically I don't have any idea what's going to happen!

The commercial traders started buying again.

Next week should pick up a little but we probably won't get any big move until after labor day.

I'm watching the dollar.

So if that's the case then why are commercials buying? It could be one last bull trap, who knows. This is the part that's puzzling me.

I quoted a few relevant parts from last week when I clearly stated "I have no idea". Well I never expected that we'd break our trendline on very large volume! That was a big surprise. I read on CNBC that there was a rumor about banks and that caused the selloff. I have no idea if it's true and no way to prove it.

First chart is the bank index. We're still in an uptrend here. We don't get volume here so let's widen a bit and look at financials. First a list of the ETFs and the percentage they make up of the S&P 500. This is from 2006, I can't find one more recent (if you have one let me know):

From: ETF Components of S&P 500 | ETF Trends

 
Code
100% SPDR ( SPY) 14% 
 10% Consumer Discretionary SPDR ( XLY) 19%
9% Consumer Staples Select SPDR ( XLP) 12%
10% Energy Select SPDR ( XLE) 17%
22% Financial Select SPDR ( XLF) 16%
12% Health Care Select SPDR ( XLV) 7%
11% Industrial Select SPDR ( XLI) 11%
3% Materials Select SPDR ( XLB) 18%
19% Technology Select SPDR ( XLK) 11%
4% Utilities Select SPDR ( XLU) 17%
As you can see the largest sector group in the S&P is financials at 22%.

Second chart is XLF. Notice that we've broken two trendlines (each time marked with an arrow). The first TL broken (orange) there was a pullback up to the trendline. I've found this to be very common but it doesn't always occur so that's one one general enters on a TL break. The 2nd TL broken (blue) is just a small trendline inside the major orange trend. But then we make a new uptrend in purple and this uptrend is still in tact. It'll have to drop below the last swing low to make a downtrend. As long as XLF is in an uptrend, it's likely to pull the S&P up with it. We added XLF for volume so let's look at that. The big down day had really big volume and the bounce is on decreasing volume. Normally this is bearish, but when the decreasing volume is due to a holiday weekend it becomes less reliable. So we have to wait until Tuesday to see what's going to happen.

Third chart is QQQQ. This one tracks the nasdaq and it's not into financials. So if financials really were dragging down the S&P, it shouldn't have had as much of an impact on the Nasdaq. The QQQQ has been underperforming the the S&P recently, which you can see from the QQQQ:$SPX ratio in one of the bottom panels.

Here we see that QQQQ also broke it's trendline while falling out of a broadening top formation. We're currently in a pullback up to the broken trendline, and that itself makes a new trendline in blue. So QQQQ was hit pretty hard by the selloff.

It's important to point out that a trendline break does not mean a new trend in the other direction. It just means the trend is changing and is losing momentum. A new slower less steep trend can form, as well as consolidation or anything else. This is why we watch the new trendline and the major swing pivots. Until 38.5 is broken we're not in a downtrend.

Ok now for the S&P index which is chart 4. We pretty much see the same things as QQQQ. Trendline break and pullback to the trendline. So we're watching now to see if price stops at the broken trendline or if we're just in a new less strong trend.

I originally went to stockcharts because I wanted to compare the ES volume with the S&P. The ES volume was the highest since January, for the S&P it wasn't as high (we had more volume in August). I'm still trying to figure out what to make of that.

So back to tradestation, chart 5 is ES daily. I've marked off the broadening top, the trendlines, the S&R lines, and a couple volume patterns.

At the bottom is an almost High Volume Churn. Volume was slightly below average. If it were HVC volume would be above average. This shows traders buying it up and stopping the sellers from pushing prices down. But there weren't enough sellers to make high volume. So the result is inconclusive.

The next bar is a low volume bar and this could be forming a Low Volume Pull Back pattern which you can read about here:



If the pullback continues on low volume and stops at the broken trendline, that would show the rally is losing steam. If volume increases and we break above the broken trendline, that would show the rally is still on. We're currently at resistance at 1016 which held twice in August and in my opinion only made it above because it gapped above (the book I recommend in the volume thread, Master the Markets, talks about gapping through S&R). So I expect continued resistance here. If we break 1016 then I think we're headed to 1038.75. If we don't break 1016 then we could be forming a sloppy H&S pattern.

So as you can see this week's action gives us a lot to think about and we can plan out what can happen and what we can do in each case.

There is one snag in the picture.. Nasdaq commercials were major buyers during the last COT report period which ended on Tuesday, the very day of the big decline. So I suspect they were buying on Tuesday since that's the only day with really big volume. S&P commercials were net sellers (barely) so we can say they didn't participate in the buying spree. The DOW commercials were net buyers, a medium amount.

This is interesting. I am wondering if maybe financials will have some bad news ahead, and the DOW and Nasdaq won't be affected. The next COT report should give us more information.

Last chart is the dollar index, we're stuck in a trading range so until we break out we're in a holding pattern. Commercials are supporting the dollar so I'm betting on a breakout to the upside.

Crude is hitting a projected reversal date very close to it's target. It recently formed a double top. Gold broke out to the upside. Usually gold and crude move together so we have a divergence here. Crude is at support now so we'll see if it follows gold or if gold falls down. If the dollar breaks out to the upside it could be a final knockout for the rally in gold.

Let me know if you have any comments or questions. I feel like I'm talking to myself but it's a learning experience for me so all is not lost.

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 cunparis 
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cunparis View Post
If volume increases and we break above the broken trendline, that would show the rally is still on.

If we break 1016 then I think we're headed to 1038.75.

Last chart is the dollar index, we're stuck in a trading range so until we break out we're in a holding pattern. Commercials are supporting the dollar so I'm betting on a breakout to the upside.

I quoted a few parts of last weeks update. We broke 1016 and went up above 1038.75 where we ran into some selling pressure. We went above the broken trendline so if we continue above it then it wasn't just a pullback to the broken trendline. And I drew a new trendline for our new channel. We're at the top and oversold so it's possible that we pullback a bit. As long as we don't break a low then the rally is still on. When will this thing every die??

Due to the fact we're oversold, on the upper channel, with bearish divergence on momentum, I think we're headed lower this week. 1034.25 could act as support, if not then down to 1011.50.

The dollar dropped below support but not by much and I suspect it's a fakeout due to the bullish divergences in the momentum.

Not much else to say, I've been focusing on scalping this week and also working on some really short term trading for ES (1-5 days). More to come..

Have a good weekend.

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 cunparis 
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Due to the fact we're oversold, on the upper channel, with bearish divergence on momentum, I think we're headed lower this week. 1034.25 could act as support, if not then down to 1011.50.

The dollar dropped below support but not by much and I suspect it's a fakeout due to the bullish divergences in the momentum.

Last week I thought we'd head lower and it turns out we didn't. However I didn't see anything meriting a trade so no harm done.



As you can see in the chart we poked above the upper trendline which often shows exhaustion, especially when we ran into Stopping Volume. We have a bearish divergence on my momentum indicator. We had above average volume this week and judging from the bars it was selling volume coming in. Friday we had a HVC climax bar (for more on HVC and selling volume please see my volume thread). Also there is a brooks reversal pattern in that we had a trendline break and then a retest of the high. In this case we made a higher high but we got a reversal (IMHO I'm still learning his patterns). Fore more on the Brooks book please see my brooks thread.

Commercials are not buying (or selling). It was commercial buying that triggered the move up after the climax down day.

All this tells me that the market has found supply and should turn down. We may retest the high again before heading down or that could come later.

Trading idea (at your own risk): Enter short 1059 STOP (a break of Friday's low) with a stop at 1072 (2 ticks above Thursdays high). Target is 1035 which is prior resistance which should act as support. This makes a reward:risk of 24:12.5 which is 2:1. It's a good trade in my opinion because it is supported by volume patterns and the bearish divergence. In fact I see no reason not to take it, if you do please let me know. I'll be taking trading it.

Also of note the dollar is pulling back from it's low and could be starting a pullback in its downtrend. I think there is still potential that the dollar will break out to the upside but until proven otherwise the trend is down. A breakout in the dollar will be bad for the indexes & commodities.

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 cunparis 
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Trading idea (at your own risk): Enter short 1059 STOP (a break of Friday's low) with a stop at 1072 (2 ticks above Thursdays high). Target is 1035 which is prior resistance which should act as support. This makes a reward:risk of 24:12.5 which is 2:1. It's a good trade in my opinion because it is supported by volume patterns and the bearish divergence. In fact I see no reason not to take it, if you do please let me know. I'll be taking trading it.

I'm in at 1059. I debated on waiting for the day session but if other traders arrived at the same conclusion it could gap down and lock out the shorts. The risk of entering on globex session is that Friday's close was so close to the entry stop order that it was sure to trigger even if price is going to go up.

Will scale out half at profit target and if things look good swing the rest.

Let me know if any of you took the trade, even if it's on simulator. Which btw if you're interested in swing trading you should at least be paper trading.

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 cunparis 
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Well I didn't count on the Fed FOMC news this week but it sure ruined my trade. Went up enough to stop me out.

In hindsight I should have exited at breakeven on Monday's reversal. that was a big clue that the market was heading higher. I regret having missed that one but I won't let that happen again.

Today we're making a higher high on lower volume and there is even more bearish divergences. My next trade will be a sell stop 1 tick below Monday's low. If we take that out I'll be more confident that we're heading down.

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 cunparis 
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Well I didn't count on the Fed FOMC news this week but it sure ruined my trade. Went up enough to stop me out.

In hindsight I should have exited at breakeven on Monday's reversal. that was a big clue that the market was heading higher. I regret having missed that one but I won't let that happen again.

Today we're making a higher high on lower volume and there is even more bearish divergences. My next trade will be a sell stop 1 tick below Monday's low. If we take that out I'll be more confident that we're heading down.

Ok I really didn't intend this to be a journal but.. I liked the price action (i'm a bear) so I put in a sell stop 1 tick under today's low thinking it'd get hit overnight. I was surprised that it got hit today. So I'm now short again. The R:R is even better, my stop is 1076. I added an extra contract and I've almost made back what I lost on getting stopped out. It's very important that if you get stopped out and you see an even better setup that you take it. Several times I've gotten stopped out a few times and given up (like in Gold right now) and then missed a huge move. Trading small size so your losses don't hurt is the key to doing this. If ES is too big you can trade SPY.

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 cunparis 
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I took the first trade on Sunday based on the HVC and bearish divergences, it looked low risk and good for me. I didn't think of the FOMC statement and the impact that can have. This goes to show that you can have a perfect setups (mine wasn't perfect but for the sake of discussion) and the outlook can change from one day to the next, even intraday.

If last week's setup was good, this one looks even better. I'm already short and as of now I've recovered my loss and even have some open profit. I will protect it this time.



Here we have a sloppy double top (sloppy due to FOMC statement). I really think some professionals took advantage of that by accumulating on Monday and distributing on Wednesday. When i trade these I like to enter on a break of the swing low. I trade this every day on a 5min chart. If the swing low acts as support, as it is now at 12:49am ET, then price could stall here. If it breaks the swing low then the next support is 1035. I'll be watching this closely.

Also notice:

- A similar pattern happened at the last swing top (marked by the green line).
- There was a trendline break (purple) with a retest of the high.
- There are negative divergences with My Momentum & LBR310
- Monday & Tuesday were LVPB
- We're in a very tight range (see bottom indicator) and range contraction is usually followed by range expansion

on that last point, we know there is a big move coming but we don't know the direction. Yesterday's bar is telling me that the direction is to the downside but that could change at any moment.

Programming Note:

It still seems as if i'm posting to myself here so I'm probably going to stop. I post on the forums for three reasons: to share with others, I pay more attention to what I do (chart annotations, analysis, etc.) and to get feedback. Lack of participation means the former & latter aren't productive and I'm not sure the 2nd can justify the time it takes.

The other reason is that I'm moving away from a weekly outlook type idea and i'm looking for specific setups that I've been trading on the 5min chart. On a 5min I make no predictions, I just react to what price tells me. I see no reason not to do the same here. For example, on a 5min chart the way I trade CL & Euro every day, I would be long right now. On the daily I have too many biases about the economy, the dollar, bear market rally, etc. that I'm not reacting to what price is telling me. I'm looking for signs in the price that support my beliefs. This is very dangerous.

So let me know what you would like to see. I'm leaning towards starting a journal where I try to post all trades, swing & 5min all combined.

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 cunparis 
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All I can say is "WOW!". Well that's not all but you get the idea.

I thought we'd have a pullback to 1035 and then make another attempt at the high. However the last two days were very strong down days on high volume. All that while the unemployment numbers & home sales were "good". Me thinks the professionals are hurrying to unload all their shares.

I was planning to take some profit at 1035 but now I think this has a lot more potential. the question is will we test the high? We already have a double top. We may get a double top pullback but I'm not sure.

Friday's COT report will unfortunately contain the data up until Tuesday, before the landslide. But if we see that the commercial hedgers were selling before the 2 big down days, then we could assume they were selling even more. If we see them buying that would give me some concern. The last time we had a down climax bar (9/1) we got a HVC the next day as the commercials bought up all they could. Let's see if we get a HVC, if we do it might be good to take partial profits. Can always reshort again.


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 Big Mike 
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Michael,

I know you didn't intend for this to be a journal but it reads like one and I find the posts quite useful and interesting, I'm sure others do too.

Maybe if we change the thread title from "cunparis...." to just "Weekly S&P 500 Outlook" and then ask again nicely we'll get some participation from fellow traders? <knock, knock -- anyone home??>

Mike

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  #42 (permalink)
 cunparis 
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Big Mike View Post
Michael,

I know you didn't intend for this to be a journal but it reads like one and I find the posts quite useful and interesting, I'm sure others do too.

Maybe if we change the thread title from "cunparis...." to just "Weekly S&P 500 Outlook" and then ask again nicely we'll get some participation from fellow traders? <knock, knock -- anyone home??>

Mike

The real issue isn't the participation, it's that I'm changing my mind about the whole idea of an outlook. I think it sets up a bias and the possibility to want to be right. What if I say "I think we're going down" and then on Tuesday I see a bullish reversal pattern? I think weekly is too long of a timeframe and I don't have time to update it every day. So my idea was to forget predicting and just trade based on price.

In the beginning I had lots of breadth indicators. After extensive work and development (100+ hours) I couldn't prove they had any preditive power. One of the sources of the data was sentimentrader.com where I've been a member for over 1 year. I'm seriously considering canceling my membership. The site is great and the daily commentary is really great. But it's not making me money!

So this is why I'm thinking of just going to a journal. My trading is focusing more on daytrading anyway. The swing trades are pretty rare. And if there's not a trade setup then I don't care what the market is doing.

I hope this makes it more clear. I've been struggling with this since I started. In fact I started it because I wanted to see if this breadth data could have predictive power. So far the TRIN is the only one I've seen to consistently test positive and it's not good enough to be stand alone. SO I try not to trade against it but that's about it. Actually TRIN & COT. That's it.

Finally, my swing trading style is approaching my day trading style, so it makes sense to combine the two into one.

I agree to rename this thread and I hope someone would be interested in continuing it.

PS: Mike can you rename it? I can't.

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 cunparis 
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Not much to say, the drop was expected but the speed wasn't. ES came within 1 pt of my first target. I wasn't here when it happened and it had already pulled back by the close. The volume on Friday was less than the previous days and it wasn't HVC. Buying at 1035 was expected. The question is will there be enough buyers to challenge the previous high? We already had a double top so the most likely is a double top pullback which will be an attempt to take it out but should fall short. This pullback will make an excellent point to establish or add-on short positions. How you do that depends on how you want to trade it. if you're aggressive you can take a reversal in the pullback. If you trade breakouts you will wait for 1035 to be taken out. This is a matter of personal preference.

I've been writing about the dollar. Well the dollar rallied a bit this week but the trend is still down until it takes out a swing high and makes a HH. I've heard that there is a dollar cycle that is favoring a rally. I don't have time to confirm or investigate all that but the source is credible. In fact he said the dollar would rally last week and it did.

Also, the commercials were net sellers again, this makes several weeks now. We won't know who bought on Friday and next week until next Friday. So the suspense is on. Although I suspect if commercials were buying yesterday we'd see more volume. Look at the last down climax (white bar) and the HVC afterwards. This is what I'm looking for now. So far we don't have it. Longs are coming in and they could get trapped if the pullback reverses.

Let's not get ahead of ourselves. I'm short and plan to give this a lot of room because I think there is potential that this is at least a short term top. October is generally bearish for the market and often tops are made in August & September. It's a tough decision cause it could pullback to the entry. Another choice is to take partial profits, move stop to beakeven and then look for another entry.

Hope all that makes sense. Of course it does cause there are never any comments. I'm writing for you Big Mike!


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 cunparis 
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after reading my last post I thought I'd clarify something: I wasn't going to exit my position at the target. The possibility was to take off a portion and ride the rest. But we made it down so fast there is a lot of bearish momentum. This morning in premarket we're testing support at 1035 so today should give us a clue. The best sign would be a LVPB. The worse would be another test of 1035 and then price moves up on increasing volume showing more buyers coming in.

Let's play it by ear..

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 cunparis 
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The past few days we've seen major selling. Climax down days. All these shares being sold are being bought by someone and I'm not sure who. We hit the next target which is support around 1013. A bounce from here is to be expected. So far the downtrend is on but this could be just a correction in an uptrend. Or it could be the beginning of a downtrend. We have made a lower lower and I will remain in the trade until we fail to make a lower low and we make a higher high.

Programming Note:

I'm going to stop updating this thread for three reasons:

- Lack of participation
- Lack of time
- I'm focusing on daytrading

I will continue to enter any low risk trades that I see on the daily chart, but I'm focusing on daytrading. September started a new approach for me for daytrading without indicators, based only on price action. So far it has been very successful. You can see some of my CL trades in the Trading CL thread and in the All You Need thread. So it makes more sense for me to allocate my capital to day trading rather than swing trading. Swing trading requires "large" stops and if I'm successful at daytrading then those risks become totally unnecessary.

Before I was trying to make thousands on my trades. Now I realize that one can make a million dollars by making just 2 pts a day on ES or the equivalent on any market (10 ticks on CL, 8 ticks on Euro, etc.) due to position sizing. So this is what I'm going to do. I'm going to make the equivalent of 8-10 ticks/day total on ES, CL, & Euro.

I may start a journal, I'm not sure. I love to share so you'll find me somewhere in these forums posting my trades.

I hope you found this thread useful and I wish you all the best of luck in your trading.

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 aFei 
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cunparis View Post
The past few days we've seen major selling. Climax down days. All these shares being sold are being bought by someone and I'm not sure who. We hit the next target which is support around 1013. A bounce from here is to be expected. So far the downtrend is on but this could be just a correction in an uptrend. Or it could be the beginning of a downtrend. We have made a lower lower and I will remain in the trade until we fail to make a lower low and we make a higher high.

Programming Note:

I'm going to stop updating this thread for three reasons:

- Lack of participation
- Lack of time
- I'm focusing on daytrading

I will continue to enter any low risk trades that I see on the daily chart, but I'm focusing on daytrading. September started a new approach for me for daytrading without indicators, based only on price action. So far it has been very successful. You can see some of my CL trades in the Trading CL thread and in the All You Need thread. So it makes more sense for me to allocate my capital to day trading rather than swing trading. Swing trading requires "large" stops and if I'm successful at daytrading then those risks become totally unnecessary.

Before I was trying to make thousands on my trades. Now I realize that one can make a million dollars by making just 2 pts a day on ES or the equivalent on any market (10 ticks on CL, 8 ticks on Euro, etc.) due to position sizing. So this is what I'm going to do. I'm going to make the equivalent of 8-10 ticks/day total on ES, CL, & Euro.

I may start a journal, I'm not sure. I love to share so you'll find me somewhere in these forums posting my trades.

I hope you found this thread useful and I wish you all the best of luck in your trading.

i just find out this useful thread. and i am trading ES 6E and CL too. i found out ur post is very useful thank you so much. If possible, could u pls continue post ur thoughts here?

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  #47 (permalink)
 cunparis 
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aFei View Post
i just find out this useful thread. and i am trading ES 6E and CL too. i found out ur post is very useful thank you so much. If possible, could u pls continue post ur thoughts here?

Hi AFei, I'm sorry you found the thread after I decided to stop. To be honest I haven't been doing a lot of swing trading, I'm focusing on day trading because it has a lot more risk and because calling the top of this bull market is a fool's game (I've been a full for many months now).

To update everyone, I stopped out of that trade on BE. I regret not having taken profit at support, at least partial profit, but I was really going for a runner.

I'm currently short and I think there is a good chance we move lower from here but the last few days have me a bit uncomfortable. We have a trading range and I happen to be short at the bottom of the trading range. Things still look bearish but I'd prefer to be short from the top of the trading range!

AFei - I have several 2 other threads going that you may find interesting:





The ideas in those threads could be applied to swing trading as well. Just more risk.

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