Panic Not

I'm new to T.A. forecasting, I don't use Market Profile and rely only on a handful of lagging indicators to confirm what I already anticipate going only on price action in swings. I have a pattern and so far it works without fail no matter how long or short-term.

Here's where I stand in regards to the markets presently:

We're going to level off here and on the chop work our way to back to 69 even in the S&P [ES]. Sellers will hold and with equal measure buyers will lose control to create a new low. But watch for sellers exhaustion in volume spikes, short covering and the overzealous wanting to go long too early. Wait for it to iron out, at around 50, is the only place for buyers to hang their hat, and by the skin of their teeth at that.

We'll then explode to the upside faster and more vertically than we saw from 1441 down here with Absu, to 1450. I expect the nominal or even catastrophic retrace along the way, and I'm not saying we'll get to 1450 overnight or even remain in control of this uptrend correction from last year, but we'll break and hold the 50% resistance grid from 1586, no matter how short-lived.

Day trades? The cards are stacked against you if you aren't aware of where you're at in this short-term bear breach compared to the bull run. Sure you'll take a scalp or two, with Market Profile's help, but I wouldn't count on a winning week.

One thing that you haven't mentioned is the price of oil. There are 2 reasons why the S&P will continue to drop if oil rises.

1. When trading at an extreme high, oil has an inverse relationship with the S&P500. (This is purely technical.)
2. With high oil prices (costs), profits of the S&P500 companies are going to be lower which implies lower stock prices. (This is fundamental.)

So until the bubble bursts in oil, I don't think that the S&P is going to go anywhere. However, the volatility brought on by the fast moving oil prices should provide more trading opportunities for day traders.

My logic rests solely on the fact that institutional traders and pit locals by and large being the only one's trading the summer months having a stake in balancing the markets, and instutitionals' own prices in stocks, a direct result of rocketing oil prices. Brick trading market movers will win this week, which means, from where I sit, day traders will be sharked and thrown out of the playground at near every turn until edge is gained for a solid long.

I think that if you look at the correlation between market volatility and day traders results you find that day traders do better when the market is volatile and lose money when the market is stable.

Priceless. I continue to comment:

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Originally posted by day trading

I think that if you look at the correlation between market volatility and day traders results you find that day traders do better when the market is volatile and lose money when the market is stable.

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Day Traders lose money in a stable market for the simple reason they didn't go long or short when they should have, suffer the chop and mostly can't read the story of price action without indicators. Market Profilers who happen to also be Day Traders will do better than most this week but the pivots, fibs and points of control in the all liklihood misread trends and swings will gobble up a lot of money and acrue a landfill of stops this week.

We can continue to banter for as long as you like, but I'm telling you: watch your ass this week. Bottom line.

Hmmmm. Thanks for the heads up. I for one sure will be watching. We haven't had back and forth commentary like this since pips was around.

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Originally posted by jimkane

Hmmmm. Thanks for the heads up. I for one sure will be watching. We haven't had back and forth commentary like this since pips was around.

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Nothing to add here but I agree with you.......

@inventor: You subscribed to receive emails on some of the posts on this forum. At the moment your emails are bouncing so you've been unsubscribed from the emails. I tried to send you an email about this but it obviously bounced as well.

I'm not sure what you meant exactly, inventor and jim, but thanks, I think.

D.T.: you'll soon see evidence of long covering in CL, when the markets show the sign of recovering this week, which by my count will further inflate and then burst the Oil Hedge Bubble.

And invariably someone will blame the news and numbers for wrecking a bear's wet dream, but it's all there in the charts, and the charts don't lie.

Xuanxue,

I meant that my work and charts aren't saying anything to me like yours at this point, so if what you say happens now I'm at least watching for that possibility. Since I'm a Fib trader (with many other things), I can watch out for being hammered this week ("...but the pivots, fibs and points of control in the all liklihood misread trends and swings will gobble up a lot of money ..."). I found last week to be the one of the best, if not the best, week I've ever seen for my methodology. So, if something is on the horizon and you have reason to believe what has been working good for me will now fool me, I wanted to thank you for opening my eyes to that possibility. I'm always open to listening when someone sees something I don't. It should be a great week, for sure, regardless of what it does, since I expect it will be moving a lot.

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Originally posted by jimkane

Xuanxue,

I meant that my work and charts aren't saying anything to me like yours at this point, so if what you say happens now I'm at least watching for that possibility. Since I'm a Fib trader (with many other things), I can watch out for being hammered this week ("...but the pivots, fibs and points of control in the all liklihood misread trends and swings will gobble up a lot of money ..."). I found last week to be the one of the best, if not the best, week I've ever seen for my methodology. So, if something is on the horizon and you have reason to believe what has been working good for me will now fool me, I wanted to thank you for opening my eyes to that possibility. I'm always open to listening when someone sees something I don't. It should be a great week, for sure, regardless of what it does, since I expect it will be moving a lot.

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Do you remember how uncanny it was that after the bear rally buyers just wouldn't and couldn't be stopped Thursday, Jim? That happened after two arm breaches by sellers early on in the upswing and if buyers wanted to hold the trend they had to prove it. They proved it by overshooting their own high of 1407 to 1414 I believe it was.

To illustrate what I'm on about if you take a 60 minute chart in your charting software and bring together timeframes to the maximum (esignal allows this feature - I'm not sure about others) then you'll note that from 1441 to present is a just a solitary bear arm breach in the bull run. For every breach guarantees a strong rally in the trend. After two breaches, you're looking for a change of trend. We saw that on a small scale Friday, where sellers took it the full length of the swing, and then some. This leads me to believe that the entire day's losses Friday served only as impetus for a bounce to regain control of 1441. If I'm right then moves will blow right through this entire swing movement's resistance grids, and too by my estimation sellers' points of control from (ES) 1405.50 - 1400 are moot; as is 1407.

All I'm saying is if you're looking to continue short right out of the box and use the way over-used fibs in this swing and rely on pivots for strong resistance short at cash's open then I fear you may be looking in the wrong direction.

If I turn out to be on the right course in my assumption and logic and end up saving some people some money I've set out to do what I intended. If I'm wrong and you're hestitant in your own trading plan and miss a few trades then a way of looking at it is that I could have saved your account from a small dent.

I note your impressive array of published material on fibs. You have to be wondering when those numbers will if ever go away, yes? I believe we'll find out this week.

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Originally posted by redsixspeed

SPQR/Xuanxue: I feel so used. lol :)) Now please answer if you would the question I put to you on 6/10/08

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Originally posted by redsixspeed

Xuanxue: aren't we going to bounce @ the 1350.75 area and continue down to 1339.25 on the ES?

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As it stands I called three winning trades in one movement. My trying to predict movements beyond one was a fool's errand, it turned out. That is doing so with only a decade's worth of data in esignal. heh Seriously, despite my tauting to the contrary, I, too, know not where the markets are at.

I called 1350 based on two premises: a) I knew sellers were trying to breach the arm at 1330, and b) I didn't think they'ld succeed. 1350 was a decent area of control for buyers from Feb. to March of this year but was wearing thin. Strong enough however to get a bounce and regain control, though. I knew the 38% support grid from 1253 to 1441 would be broke but didn't think sellers would manage to control it. 1350 was the only answer for me.

Buyers have at least for now gained control of the 50% support grid, but that strong move to the downside above Thursday's high is telling the bears aren't done. I don't know. Sellers had free reign of this stretch to 1325 in one day's trading on April 11. Then buyers took it 1441.

At this point a breach attempt at 1325 seems imminent. Will it hold? If not will 1310 hold? If we do get below 1310, it's no man's land and tells us that the markets were overbought at 1586 and has shifted to an area of correction to the extreme. On the other hand if this year's entire movement is the creation of a beginning bull trend's first arm, an attack on 1250 isn't an unreasonable assumption. Obviously if we breach 1250 we stared too long into the abyss and it answered. There are no limits to how low this could go.

I'm only trading intraday charts until I know with certain clarity how 1225 reacts.

Then, 50% may have held. We'll just have to wait and see.