:: actio-et-reactio ::
amg's market charts and blather
What a remarkable finish to the day, with the added touch of finishing just above the prior swing low. The intraday expando was a particular treat. These can be very confusing to trade as they reflect intense emotions with the wild swings. Because of that, traders sometimes interpret them as reversal signals, but more often than not they are continuation signals, as was todays. Plenty of volume too. The bulls have the advantage just now.
Daily ES updated chart
Still in the "Reaction zone". Tagged a loose Globex low from 3/22 (1168.75) and managed to close above it. That little candle is today's globex action. Another interesting day in store tomorrow!
29MarESdaily.png ES Daily, updated 29 Mar 2005
Opening Range, volatility breakouts, and pivots have become favorites to many day traders as they give a simple visual structure to price action. Mark Fisher has combined these methods in what he calls ACD, short hand for the volatility targets and opening range levels used in the meat and potatoes strategies he has developed over the past 20-30 years (he mentions he got in the business at 12 years old).
While I don't use his strategies, his ideas are interesting enough to me that I've incorporated his opening range ideas. His NYMEX symposium is simply dynamite and the first session a must for any trader. I've prepared a page summarizing the method and include a sample graph, along with templates suitable for Ensign users. Enjoy!
Mark Fisher's Logical Trader ACD Method
This chart is a close up of ES, with what might look to some like excruciating detail. The idea here isn't to be elegant, but to chat about a couple of methods and suggest possibilities.
click to open a larger image in a new window
20d BOLLINGER BAND EXTREMES
There are a number of methods that use 20d extrema. The signals shown here applies Bollinger Bands to each of the 20d Low sma (simple moving average), High sma, and 20d sma and places a dot where price crosses over the 2 standard deviation band (upper band for 20d H, lower band for 20d L, and upper or lower for the 20d).
There are two overlapping 20d L and 20d "buy" signals at this low. Those familar with BBands know price extremes can ride the outer band and be a sign of the strength of the trend. Thus, corroboration should be used, eg, an oscillator, shorter term moving average, or other indications.
The two oscillators are OS, so their reversal would add confirmation, as would a reversal of the 9wma shown on the chart.
TRENDLINES
I consider Andrews median lines "fancy", but powerful, trendlines. Price fell out of the longer term Blue fork and, as I show it, is now in the range of that forks "harmonics", ie, mirrored extensions of the bisect, in this case at 150% and 161.8%. Price could well go to 200%, but that's getting ahead of things.
Price tested and is rejecting the Black bisect, right at the Blue harmonics, which creates a pivot for the Green fork. The Green and Black forks are right on prior Low Closes (1166.25 and 1174.31).
Finally, simple TLs are both points of support and resistance.
BREADTH
The McClellan is not strong, but shows signs of a reversing its prior slide. Volume during the decline has been moderate. A capitulation isn't necessary, imo, for a short term low.
POSSIBILITIES
Longs are favored with downside risk to 1164 (prior low) and 1155, the 200% Blue fork harmonic. The possibility of congestion may be about equal. Because price has tipped positively, what happens between 1185 (prior low) and 1190 (TL/Bisects) will be important.
Finally, comment on the candles. The Reaction Zone is also in the shadow of Tuesday's (3/22) long candle. That 3/24 closed above 3/23's open is bullish. As seen in this 15m chart, volume is positive (the yellow lines), and with a positive close on Monday, the daily pivots (blue lines) will have reversed.
Small Clock, simple options
Here is a link to a small countdown clock made some time ago for the Woodies CCI room (before it bacame Woodies CCI, Inc.), by Bennie_T. He distributed it free of charge. Multiple instances are allowed, and the time increments are 1m, 2m, 3m, 5m, 10m, 15m, 30m. It looks like this:
To download this tiny program, Right Click and Save-As in a folder on your PC:
http://themysterybox.com/amg/ensign/3_5minCountdown(b_dt).exe
Larger Clock, more options
There is also a version with more options, ie, more timeframe selections, but it does have a bigger footprint. This one is also from the Woodies CCI group, and is also distributed free of charge. It looks like this:
Here is a link to the dacharts.com page where it is listed.
http://www.dacharts.com/qtips/min-bar-alarm.htm
Both versions allow multiple instances. That is, you can open up several of them and place them next to the chart you are watching.
SMR and Trading Day by Day, Chick Goslin's Intelligent Futures Trading (IFT) methods
When I first heard his name, I couldn't help but think of a family of swans, the chicks trialing in the wake. The cuddly image was shattered by the picture of him at his site: a burly smiling ex-Marine crouched down next to his shaggy dog friend. He has acquired a number of faithful adherents on the web, particularly at the trade2win boards, who as of this writing have over 22 pages of reviewing, demystifying, and at this point, documenting their use of the method.
Goslin's IFT might sound complicated, but striped to its essentials, it is a straightforward method with a very nice number-weighting of the long, medium, and short term signals the system generates. I haven't backtested the results, but each piece of the system is simple and will be recognized by most technicians and market hounds.
The 3-point System is outlined at SMR in this text file. It reads a bit obtuse and mysterious as it is sprinkled with his own nomenclature of the elements. Can you fault him? We all do that with our methods! However, the code can be cracked without resorting to buying the book. My intent is to present a TA tinker with enough to create the template on their own and find out if their interest is peaked enough to buy the book and explore in depth the methods and nuances Chick has developed. The book reviews indicate there is value.
The basic indicators:
- Trend Line is a 49 SMA of price.
- DL is the "Dotted Line" Intermediate Term indicator, which is a 16ma of the 3-10 MACD.
- SL is the "Solid Line", ie, Short Term indicator, which is the 3-10 MACD.
An imaginative leap is taken for position trading. Chick assigns each of the three main components a value of +1, 0, or -1 depending if the indicator is moving up, sideways, or down as follows:
- Long Term49/50 sma (1 pt), also called the Direction Line
- Intermediate16ma of 3-10 MACD, also called the Confirming Line (+/- .5 trend, +/- .5 when above/below zero), and can lag 5 days
- Short Term3-10 MACD value (1 pt), aka the Timing Line
One then counts only the positive contributions when the trend is up, or only the negative values when down. +/- 2 is considered bullish or bearish, and values between +/- 1.5 are considered neutral (ie, no position).
Finally, to eliminate lag and anticipate a change in the Position Indicator, the past values of both the 49 sma and the 16 ma on the 3-10 MACD are reviewed to see if a lower or higher value is being "dropped" off by the ma calculation.
All things considered, a very sensible approach.
|
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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