:: actio-et-reactio ::
amg's market charts and blather
The number one question I am asked is: Where do I find out more about Andrews pitchforks?
I have not personally used pitchforkprimer.com, but it is a low key site with a chart teaser posted now and then. What feedback I've read has been positive. It looks hands on, ie, turn in your examples as you learn, which may appeal to some.
The fast track is to visite marketwarrior.com. Patrick Mikula has published a very simple and concise book titled The Best Trendline Methods of Alan Andrews, which I most highly recommend to those who like a working desk reference. Don't think $55 is too much for such a slender volume-- you won't find the material in such an easy to use form elsewhere. Even Alan Andrews own course material isn't as clearly presented! If Andrews pitchforks "speak" to you, this is my top recommendation.
It is no coincidence that a love of Newton's first principle, "for every action there is a reaction", actio et reactio as I learned it in my first undergrad Physics class, is at the core of my website. This is refelected not only in my market oriented "blather", but also in my meanders, which while genuinely ad hoc, has at its heart a desire to seek balance, however ephemeral, in the world around me. No doubt this is what triggered my love of bisects, and which I have shared with readers of stockcharts.com "Public Charts List" for the past three years.
Many people have written to me asking just how to use these lines. Drawing them is straightforward, but having drawn them, how does one trade them? How does one know which points to choose as pivots? Is it kosher to draw bisects from gaps, from mid-points, from close-only, etc etc. While there are many who would be adamant about their particular use, and might even point to some of my work and claim foul, I would beg to differ. One must always go to first principles before piling on higher principles. Bisects are about as simple mathematically as it gets: pick a point to start from, choose two points in the future and divide the space between those two in half. If price "behaves" with seeming order relative to those points, stick with them until it no longer does, then draw another set.
Alan Andrews freely attributed his work to Roger Babson, who like Andrews, was also a scientist. Roger Babson, founder of Babson College, says in his autobiography, appropriately titled Actions and Reactions,
Let me say that the ideas that underlie my work were selected from the Bible and the writings of Sir Isaac Newton.
Median lines can tell where the prices are headed, and the place they will reach, about 80% of the time, and when approximately that place will be reached. Slopes of alternate MLs of comparable length indicate the trend. There is a high probability that:Use the search block to the right to find more comments on bisects and forks.
1. Prices will reach the latest ML
2. Prices will either reverse on meeting the ML or gap through it
3. When prices pass through the ML, they will pull back to it
4. When prices reverse before reaching the ML, leaving a �space�, they will move more in the opposite direction than when prices were rising toward the ML.
5. Prices reverse at any ML or extension of a prior ML.
Excuses, excuses for abandoning my market blather pages. I've been completely absorbed by my new intraday charting software, Ensign for Windows, or EW.
EW comes with my highest recommendation, particularly for those interested, as I am, in harmonic analyses such as Fibonacci, Gartleys, bisects, and cycles. It is also for those keenly interested in traditional TA tools such as CCI, moving averages, RSI, etc, with a FABULOUS alert capability. I am only just appreciating the latter as a way of filtering the false signals most indicators are prone to.
EW requires subscription to a data feed, and the "Basic Esignal" package to EW subscribers, which includes the CME e-mini (CME fees additional cost) is more than enough for most purposes, making the duo cost competitive, but by far and away the best value in indicator offerings. For those who drool over Tradestation, you will find that Ensign has many similar features, albeit not the back-testing. Ensign does have unique playback and simulated broker features which will allow you to test run your set-ups and do some "real" paper-trading.
Perhaps among its best unique features is the community itself: Mr. Howard Arrington, along with his support staff and enthusiastic "dacharts" users, are ever helpful and a font of ideas.
Warning-- you may get absorbed to the point of neglecting other things, such as feeding the family and recording market blather!
notes from the SCC page:
9/28, Sunday: Looking narrowly, there are indications of a rebound in both the daily & weekly charts: (1) Friday gapped down on somewhat lower volume than the past two days, also down; (2) the weekly chart is clearly kaput, but often price will revisit the lower trendline of a broken wedge. These two indications feed the idea of a rebound, but don't make me bullish, as evidence for overall weakness predominates. In other words, a bearish bias is warranted.
Here are the September charts: Daily ..::.. Weekly ..::.. Monthly
9/25: Thursday after OE is often a fade of momentum going into it. However, some nasty damage on the daily RSI, albeit with support on the old range channel fork. The VIX study (end of page) shows a top, confirmed with a wedge break on the weekly chart. Even with a higher weekly close-- which would keep the bull breathing a bit longer-- RSI has been weakened. I'm flat and cautious here.
9/19: Triple Witching, OE, just another day at the casino. Does anyone else see a wedge (bearish) on the weekly? Note: If price does not reach the upper 'navy blue' fork on daily (over the next few days), that is a likely failure and 1050 will be saved for another bullish campaign.
9/18: Broke congestion w/a MACD kiss and move into 1930+ range. 1050 is on both daily/weekly charts. SPX/VIX (last chart) entering 'overbot' area.
9/18: I asked earlier, Will September be the long awaited correction? It looks very bullish right now, but there are 'overbot' indications. However, cautious traders are not the same as bearish. The month is not yet finished, so the bullish monthly chart is still only potential.
9/12: There is 'congestion' support in the trap area, which if fails, targets the 1000-1004 area. If that breaks, 984 is back in view.
Notes: the anticipated Acc/Dist on the Small Caps crossed, but may now consolidate with a downward bias; the RSI Neg Diverg on the SPX daily unfolded and may find support on the longer term RSI fork (this support also broke); price was turned back at the 'big picture' 1021 61.8% fib, but held a key support at 1009. The 'fork trap' looked to contain further downside-- and it did. See 9/18 comments.
On the bullish side is a 'hyper fork' potential, considerable volume and at best a stabilizing fundamental picture. On the bearish side is that this market hasn't taken a breather, the small caps are exhausted, and the safety of big caps is just that: safety and not particularly growth.
OK, so the market managed to tack on a few points. 40 of them. Net. Not bad, if one had the stomach to ride that gyrations. The fact is, the market was at 1015, with a target of 1023, on June 18, as I just noticed by looking further down the page. So it gave up 40 to tack em back on again.
Just staying with the reality, putting the feeling of churning into proper perspective.
GADS...has it really been since July that I blogged anything? Well, is it at all surprising??? The market has pretty much done nothing, nada, niente. Just jive around alot to the benefit of commission getters and slick daytrading hot shots (how quaint the language!).
Well, this is a just a "checking in" post anyway, a rewrite and post of my latest stockcharts.com blab. Here it is:
Price moved over upper channel resistance, yesterday hit the 1023 (on the weekly) and then today 1029.34 (1030 was my daily target). Thanks for the back slaps, she says no one in particular.
The question is, now what? I'm going out on a small limb and say this is close to a signficant top, not TOP perhaps, but at least one worthy of a shiver of fright. I say this largely based on the 'hyper' lime-green fork on RSI getting only the median hit where as price moved nearly to the top of it's equivalent hyper fork. Mind you, the big players have been toying with top callers for MONTHS, so I don't expect much. One other item of interest is that the OEX ratio is again rising, which indicates that my idea of the small caps having played out, if only for a spell may be in work. The roaches, which have been piled in the small caps, are starting to creep back to the safety of the larger big cap roach motel.
I remain skeptical of new-found broader bullishness (blah blah blah-- I'm tired of hearing this from myself!!). Nevertheless, the action has largely been in the small caps, which now show signs of slowing down. See the chart labelled 'OEX out of Favor' and the Small Cap Daily just below.
My bet is that the 'breakout' will be a fakeout and September will be the long awaited correction. Interestingly, in 2001, the market was rife with 'double-bottom' spotting. *This* time it is rife with top-calling, which is well supported with weak internals. We shall see....
A slightly more critical closing value, IMO, is 957, the monthly low close that launched the bull in 1998. Bears have been desperate to be proven right, while bulls have been complacent that 'this time is different'. A tug of war through mud leaving both sides more dirtied than right.
Added monthly study. Negative RSI Reversal potential on monthly. This works slowly, but the divergence is big enough to suggest the breakout may be down, however, it could continue to run, perhaps to 1050 by the looks of the weekly charts.
And here are the charts for Sept:
Daily SPX chart
Weekly SPX chart
Monthly SPX chart
|
moon phases |
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
blather: nonsensical talk.
At times my analysis log, at times sharing what I've learned. Always my own work and views.
Content: amg
Basis: glish & bluerobot
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