Go and get a curry with you palls
frugi
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Can't upload any attachments for some reason so I'll post them inline. Sorry they're so massive - if their width messes up further posts I can delete them.
First chart on the left shows Dow Transports and Utilities not confirming the new INDU high ... this has not happened for a while as you can see ... a mildly bearish sign.
The others show the dollar index and the Dow, purely for interest's sake. I made a rough worksheet to express the Dow change accounting for the dollar index - the maths is surely shaky - but you get the idea ... the Dow in $ value terms has not made a new high. Less burgeoining prosperity and more Inflated dollars desperately chasing any return to make up for their dwindling value.
Here we have lots of tedious breadth stats for various indices, showing some divergence between price and breadth.
The green lines are the indices and the blue the breadth stats such as new highs minus new lows and advancing stocks minus declining stocks.
The red circles show recent divergences and the result, a swift sharp sell off. Is this happening again (pink circles)? Could be.
Still if they like the payrolls they will buy regardless ... but if so keep an eye on breadth and beware of the pop and drop. Personally I favour a sell off into the weekend but my opinion is worthless as a trader ... anyway I am not trading till I see the reaction to NFP.
I use indicators such as breadth and volume for possible heads up but for the chap asking what to look for in MACD RSI or whatever my advice (not worth a lot and I doubt you want it anyway lol) is to drop them and simply look at price. Trade off high probability levels such as support, resistance, trend and channel lines, 50/62% pullbacks, old highs and lows, perhaps pivots or gaps, and the like. Keep it really simple. This allows for a tight stop and you will be proved wrong quickly instead of forcing your will on the market. Avoid saying it must pull back or it's gone too high ... no it musn't ... in fact if it hurts more people to go higher it will probably do so. The market moves far on greed and further on pain imho. If it's going up go with the flow and buy pullbacks or support levels until that doesn't work. You could look for a lower low and a lower high then a break of that lower low for confirmation of it not working, for example. Then sell pullbacks and resistance levels until that doesn't work any more. Fighting and wishing is destructive to mind as well as capital. Apologies for the patronising ramble I think I'm reminding myself of this as much as anyone else.
. Jeez that page is so wide now blackcab will need a 72" monitor ... sorry.
First chart on the left shows Dow Transports and Utilities not confirming the new INDU high ... this has not happened for a while as you can see ... a mildly bearish sign.
The others show the dollar index and the Dow, purely for interest's sake. I made a rough worksheet to express the Dow change accounting for the dollar index - the maths is surely shaky - but you get the idea ... the Dow in $ value terms has not made a new high. Less burgeoining prosperity and more Inflated dollars desperately chasing any return to make up for their dwindling value.
Here we have lots of tedious breadth stats for various indices, showing some divergence between price and breadth.
The green lines are the indices and the blue the breadth stats such as new highs minus new lows and advancing stocks minus declining stocks.
The red circles show recent divergences and the result, a swift sharp sell off. Is this happening again (pink circles)? Could be.
Still if they like the payrolls they will buy regardless ... but if so keep an eye on breadth and beware of the pop and drop. Personally I favour a sell off into the weekend but my opinion is worthless as a trader ... anyway I am not trading till I see the reaction to NFP.
I use indicators such as breadth and volume for possible heads up but for the chap asking what to look for in MACD RSI or whatever my advice (not worth a lot and I doubt you want it anyway lol) is to drop them and simply look at price. Trade off high probability levels such as support, resistance, trend and channel lines, 50/62% pullbacks, old highs and lows, perhaps pivots or gaps, and the like. Keep it really simple. This allows for a tight stop and you will be proved wrong quickly instead of forcing your will on the market. Avoid saying it must pull back or it's gone too high ... no it musn't ... in fact if it hurts more people to go higher it will probably do so. The market moves far on greed and further on pain imho. If it's going up go with the flow and buy pullbacks or support levels until that doesn't work. You could look for a lower low and a lower high then a break of that lower low for confirmation of it not working, for example. Then sell pullbacks and resistance levels until that doesn't work any more. Fighting and wishing is destructive to mind as well as capital. Apologies for the patronising ramble I think I'm reminding myself of this as much as anyone else.
. Jeez that page is so wide now blackcab will need a 72" monitor ... sorry.
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lurkerlurker
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Sounds right if you're short. Yeah - the Dow is being irrational. It may go up 80+ points, and then drop 30+ as longs take profits and a lot of folk settle at EOW.
lurkerlurker
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I started a new Dow thread, and it wouldn't let me upload charts either!
Thanks for the images - you've just justified my purchase of a new 19" widescreen for my dual display configuration!
What is the "pop and drop"? If they don't like the payrolls, then there may be a retracement. Am I correct that the payrolls come out at 12:30 London time, so before the Dow open? Would it be sensible to place a buy stop 10 tics above the market at 12:28 to catch most of a bullish move if they like the payrolls? Equally, would it be sensible to place a sell stop 5 tics below the market at 12:28 to catch most of a slump?
Just realised how silly that suggestion is: stops become market orders, which will be filled at the end of a strong move... Is it possible to place a guaranteed stop with CMC for an entry?
Also, I've observed that markets (especially forex) tend to retrace announcement swings in short order - would that be the case with this type of data? I hear that this announcement is probably likely to have the biggest effect on the market relative to other economic data, but I've never traded a payroll release before.
This looks interesting, and the underlying divergences don't support a continuation at the rates we've been seeing. Perhaps we will see a break of 13200 support tomorrow.
Thanks for the heads up, and I wish you every success with tomorrow.
frugi
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Hello LL,
Just before I totter off to bed ...
It's 13:30 our time.
You could place a buy stop but as you realise you may suffer nasty slippage (i.e. be filled a long way from your stop price) if price moves very fast. If trading futures you could use a stop limit which means you can define where you will accept a fill, eg within 5 points of your stop level, but of course then you may not be filled at all if the market gaps throuyg it. I'd be very wary indeed of using a SB firm to do this. I'm sure they don't offer a guaranteed stop entry.
Or the reaction could whipsaw you ... stop you in then stop you out again shortly afterwards.
You're correct that NFP is an important figure. Reactions to it, as you might imagine, vary wildly from a muted 20 point up and down whipsaw to a 100 point one way move in a few seconds. Often there will be a 1-2-3 pattern with 1 and 3 being the eventual direction and 2 a nasty pullback. Basically anything goes. It is not a figure I trade beforehand and I wouldn't touch it with an SB until it has settled down.
It might be interesting for you just to sit there and watch it with no position, perhaps ask yourself where would I take a position, if at all, during the reaction and why.
Thanks for the good wishes and likewise ... be careful out there.
Oh, pop and drop is when the market goes up fast, often after "good" news, sucking in a load of eager new bulls and everything looks lovely only for it to deflate equally fast later in the day. They often occur at the end of sustained moves too ... a last parabolic gasp of euphoria turning to disappointment, exhaustion and mass dumping of positions.
PS Off this topic but thought I'd mention it ... Brett Steenbarger's http://traderfeed.blogspot.com/ makes for an interesting daily premarket breakfast. Lotsa topics and variety with an emphasis on psychology.
Just before I totter off to bed ...
It's 13:30 our time.
You could place a buy stop but as you realise you may suffer nasty slippage (i.e. be filled a long way from your stop price) if price moves very fast. If trading futures you could use a stop limit which means you can define where you will accept a fill, eg within 5 points of your stop level, but of course then you may not be filled at all if the market gaps throuyg it. I'd be very wary indeed of using a SB firm to do this. I'm sure they don't offer a guaranteed stop entry.
Or the reaction could whipsaw you ... stop you in then stop you out again shortly afterwards.
You're correct that NFP is an important figure. Reactions to it, as you might imagine, vary wildly from a muted 20 point up and down whipsaw to a 100 point one way move in a few seconds. Often there will be a 1-2-3 pattern with 1 and 3 being the eventual direction and 2 a nasty pullback. Basically anything goes. It is not a figure I trade beforehand and I wouldn't touch it with an SB until it has settled down.
It might be interesting for you just to sit there and watch it with no position, perhaps ask yourself where would I take a position, if at all, during the reaction and why.
Thanks for the good wishes and likewise ... be careful out there.
Oh, pop and drop is when the market goes up fast, often after "good" news, sucking in a load of eager new bulls and everything looks lovely only for it to deflate equally fast later in the day. They often occur at the end of sustained moves too ... a last parabolic gasp of euphoria turning to disappointment, exhaustion and mass dumping of positions.
PS Off this topic but thought I'd mention it ... Brett Steenbarger's http://traderfeed.blogspot.com/ makes for an interesting daily premarket breakfast. Lotsa topics and variety with an emphasis on psychology.
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firewalker99
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firewalker99
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I use indicators such as breadth and volume for possible heads up but for the chap asking what to look for in MACD RSI or whatever my advice (not worth a lot and I doubt you want it anyway lol) is to drop them and simply look at price. Trade off high probability levels such as support, resistance, trend and channel lines, 50/62% pullbacks, old highs and lows, perhaps pivots or gaps, and the like. Keep it really simple. This allows for a tight stop and you will be proved wrong quickly instead of forcing your will on the market. Avoid saying it must pull back or it's gone too high ... no it musn't ... in fact if it hurts more people to go higher it will probably do so. The market moves far on greed and further on pain imho. If it's going up go with the flow and buy pullbacks or support levels until that doesn't work. You could look for a lower low and a lower high then a break of that lower low for confirmation of it not working, for example. Then sell pullbacks and resistance levels until that doesn't work any more. Fighting and wishing is destructive to mind as well as capital. Apologies for the patronising ramble I think I'm reminding myself of this as much as anyone else.
Now this is a priceless post. And I'm not being sarcastic.
Excellent post frugi, including the charts!
For all those early shorters out there... it's been said before but I think you'll want to remind yourself of it again "markets can be irrational longer than you can stay solvent". Good trading to everybody (and thanks to all those who are shorting and making my longs work out day after day after day :cheesy: )
firewalker99
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You will... if you risk trading it before the figures, it can spike 30 points down and 50 up or vice versa.
I agree, unless you are a position trader, I think you'll want to stay right out of this till it's over.
firewalker99
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Roll back 8 years... April 1999... Dow at 9800... one month later Dow at 11000. And it went to 11750 6 months later... Just to remind all of you bears that the recent climb is not thàt particulary unusual at all.
Dinos
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Steve, not sure how PM works, I'll have a look and come back to you. Fwiw, for you to get the best from Stockcharts, you can register for and just pay 1 months subscription, you will then get real time data down to 1 min charts, (seriously worth the investment to to try it out), no commitment thereafter.
Lurker, the 1 min chart threw that possibility out after I posted. I use very simplified charts after years of over complicating things. I use RSI & TRIX at standard setting, MACD & histogram at (generally) 12, 39, 9, occasionally, higher values to smooth out movements. My trigger I use is EMA set at 8 & 21, when the everything falls into place, by the time the ema8 crosses the trigger line, the price action are already moving along this trend, I then keep that position open until it crosses the 21 day trigger line again, I close positions on EMA 8 crossover, I don't close on MACD crossover as it can often leads to false signals generated by the other indicators.
I confirm the trend by monitoring the 5, 10, 15, 30 minutes charts, when each is confirmed I feel confident to add positions, theses will be closed the minute the ema crossover is achieved, at this point I can take up alternate positions.
Its suits my style, have used this for many years, very simple and yet effective, I don't look or indeed are interested what level the index can/will achieve either way, I trade daily, every day, there are trading opportunities, I trust my system implicitly and trade when it tells me. The only thing I do not do is take a trade prior to the release of any economic data, I prefer to wait for things to pan out, as other posters have mentioned, the whipsaw of the price can be dramatic.
I won't be actively trading today, as other commitments, but to those of you who are, good luck and have a nice weekend.
Lurker, the 1 min chart threw that possibility out after I posted. I use very simplified charts after years of over complicating things. I use RSI & TRIX at standard setting, MACD & histogram at (generally) 12, 39, 9, occasionally, higher values to smooth out movements. My trigger I use is EMA set at 8 & 21, when the everything falls into place, by the time the ema8 crosses the trigger line, the price action are already moving along this trend, I then keep that position open until it crosses the 21 day trigger line again, I close positions on EMA 8 crossover, I don't close on MACD crossover as it can often leads to false signals generated by the other indicators.
I confirm the trend by monitoring the 5, 10, 15, 30 minutes charts, when each is confirmed I feel confident to add positions, theses will be closed the minute the ema crossover is achieved, at this point I can take up alternate positions.
Its suits my style, have used this for many years, very simple and yet effective, I don't look or indeed are interested what level the index can/will achieve either way, I trade daily, every day, there are trading opportunities, I trust my system implicitly and trade when it tells me. The only thing I do not do is take a trade prior to the release of any economic data, I prefer to wait for things to pan out, as other posters have mentioned, the whipsaw of the price can be dramatic.
I won't be actively trading today, as other commitments, but to those of you who are, good luck and have a nice weekend.
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Pat494
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Nice 22+ Dow fut points.
Good idea about waiting for major figures imho.
However leaks can occur in rarified and high places, which may account for this rally or it could be bluff i.e. pump and dump leaving long positions in trouble.
We shall soon see. I prefer the former scenario but its risky.
Good idea about waiting for major figures imho.
However leaks can occur in rarified and high places, which may account for this rally or it could be bluff i.e. pump and dump leaving long positions in trouble.
We shall soon see. I prefer the former scenario but its risky.
stevechelt
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Thanks Dinos, I have subscribed to Stockcharts for one month to try them out, and am experimenting with the charts and settings. Please do get back to me on the PM thing when you can, I suspect there must be some setting in your profile to activate PMs. Have a good weekend yourself!
As I still have a very sick looking short it is bound to rise again today, as hobby says, the figures announced will make not one jot of difference, they will apply a positive slant and up it will go.
Good luck everyone!
As I still have a very sick looking short it is bound to rise again today, as hobby says, the figures announced will make not one jot of difference, they will apply a positive slant and up it will go.
Good luck everyone!
andycan
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Stephen
any drops are corrective as it stands this is sucker plays by the pros, and there is plenty of blood for the taking
it wont turn one day and drop 2000 points its going to have a topping action most likely sideways with a few hundred points range for several weeks maybe months then all bears will get their wish
Hi Andy, long time no speak.
I hope things are going well for you.
I agree with you 100% and I've posted a pic of the last bull market top.
It will look something like this I reckon. Look at the 2000 plus point swings!
I'd be happy for any small pull back to cover a little but if that's what most are hoping for it's the last thing that can happen.
What I've been saying to myself lately is to 'trade what I see'.
If my signal says short never mind the data, the boards, the news, I'm going short, same on the long side. I want to sit in a darkened room and just trade off the info coming through to me in the form of a bar chart.
Stephen
I hope things are going well for you.
I agree with you 100% and I've posted a pic of the last bull market top.
It will look something like this I reckon. Look at the 2000 plus point swings!
I'd be happy for any small pull back to cover a little but if that's what most are hoping for it's the last thing that can happen.
What I've been saying to myself lately is to 'trade what I see'.
If my signal says short never mind the data, the boards, the news, I'm going short, same on the long side. I want to sit in a darkened room and just trade off the info coming through to me in the form of a bar chart.
Stephen
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Dino
Are you saying you sell when the 8ema crosses below the 21ema and exit when the reverse occurs?
Or do you enter on a cross of the 8 over the 21 and exit on price moving over the 8, 21 or on 8 crossing the 21?
Sorry I couldn't make out from your post.
I too have been using these two lags on the FTSE 1 min of late and it really does seem to pick the two or three high / lows of the day.
Stephen
Are you saying you sell when the 8ema crosses below the 21ema and exit when the reverse occurs?
Or do you enter on a cross of the 8 over the 21 and exit on price moving over the 8, 21 or on 8 crossing the 21?
Sorry I couldn't make out from your post.
I too have been using these two lags on the FTSE 1 min of late and it really does seem to pick the two or three high / lows of the day.
Stephen
andycan
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Hi stephen certainly been a while
how deep the correction will be is still for debate but it will be a beauty
i have had the idea in my mind for quite a while and a mate posted me a chart of an event that happened many moons ago on the dow and its uncanny how similar it looks to todays action, so that confirmed what i was thinking,
meanwhile you have to go with the illogical nature of the markets and that is up and any move down is just a buying opportunity pro are selling to the public, brokers are telling their clients there is no end to the bull campaign, and the powers at be are dressing it up just ride it whilst its there
good luck
