DOW - ES Charts 25/11 - 29/11

[ChartMan]

A look back at traditional Dow TA..... nothing changes. It's still obvious, that whilst trading ES maybe more beneficial for all the right reasons and the ES may still always leaad the Dow, it's undeniable that the dow presents clearer pictures of what is happening. The dow chart is documented, but take a close look at the Bear Flag from 16:00 to 16:45... Where was it on ES? And the ND bottom? - clear as you like on Dow, not so clear on ES. There is a strong argument for taking the slightly longer viewpoint on DOW TA to base trading decisions on ES. Couple this with the ES volume analysis and you have some powerful tools in your bag.
Anyway, 50 up on the day.

 

[ChartMan]

Ominous Inverse head & shoulders on CCI and expanding triangle on the price.The last peak has dipped off and may be the start of a rounded top..... watch this develop... Tripple top at 935 but reluctace to drop 925 may mean some sideways action....

 

[ChartMan]

According to Chris Manning, "blow off bottoms" are where there is a signficant increase in volume at the bottom of a trend. Iv'e seen a few of these and made mental notes. Yes, it's true, but are they real bottoms on a longer term basis? The answer lies a little later in the price action. Take the one at 16:59. Yes it was a bottom, but was that the time to go long? Not really. It was bouncing on the 50% mark, so could go either way... if the next down tick volume peak made a higher high. We know ES likes 0's and 5's so we watch the action and it moves up to the 5's.... then bounces down again to make a lower low. At this point the down tick volume makes a lower high, signalling a long entry on volume divergence. So a long here with a stop at 922 is a good entry, with a minimum target of 925. Why the stop so close? Because if 922.5 fails, the next likely stop will be 920. Tracking the volume slope would have kept you in at the pullback to 924 as the up tick slope was positive and no signs of significant down tick volume growth. At the very least, that should have kept you in until 930.

 

[ChartMan]

Bear Flag suggests a target of 8576.That's another 100 points down from tonight's close. Do we trust TA? Well, I'm not asking you to, but I have to follow the things that I have learnt and believe in them. One has to have a set of rules, believe in them, execute them and be ready to cut at the soonest indication that there is a deviation from the expected plan. You weren't wrong, the market just didn't follow the expected rule this time. No shame in that. More a pat on the back that you had both the courage of your initial conviction and ,more importantly, you had the common sense to recognise the market just wasn't going to play ball with you this time.
So, take pride in the fact that the market didn't take you for a ride and a fool, instead of thinking it's another failure, another losing trade.

 

[ChartMan]

Pretty much unspectacular day.........down down up down Highlight of the TA day- the positive divergence bottom at 4pm, having failed to penetrate down through the 50% fib level from 920 to 915.

 

[ChartMan]

Can't figure this one out. I guess the answer is there , somewhere. To me, it seems that the uptick volume from 5pm onwards seems to be just ahead of the downtick volume, but the price just went down all day. Is this a pre-cursor to an up day tomorrow? We'll see.
Once again, volume divergence tying up with RSI and CCI divergence to signal a bottom.

 

[RogerM]

Difficult to work this one out. I reckon that a lot of traders are taking profits and squaring the books ready for a 5 day weekend. Only half day trading tomorrow, and closed Thursday for thanksgiving. And I bet a lot of the big players won't be around on Friday. So not tempted to read too much into the charts until Monday - could be some volatility in between tho.

 

[raider1]

Bear Flag suggests a target of 8576.That's another 100 points down from tonight's close. Do we trust TA?

Hi Chartman,

I didn't see the bear flag you mentioned, but your 8476 rang a bell. I checked my analysis from last night, and interesting to note I have 2 fib extensions coinciding at 8573, also a resistance point which delayed the rally for a while.

Hmm..... Let's see.

R1

 

[ChartMan]

Raider, did you mean you missed it but see it now, or you just cant see it now? If it's the latter, it's the two parallel uptrend lines on the dow chart. Perhaps I'm stating the obvious.... I like it when someone else's analysis, via a different route, presents the same answer.

 

[raider1]

Sorry, Chartman. Didn't make myself clear.

I know most of the common patterns from TA training, but I don't trade them. So, I don't look out for them.

I was just demonstrating that coming from completely different angles, TA targets often arrive at the same place.

Doesn't make them any more likely to work, tho!

R1

 

[ChartMan]

Nothing to say about this except it's clear about the vol going up yesterday. Mr. Mooms said it was the big boys buying at all cost. That must mean there is one hell of a lot of confidence out there.

 

[ChartMan]

Seems like this is being sustaned on no volume...What gives?

 

[ChartMan]

So, the bear flag got wiped out on overnight trading and continued on up. The holiday and half day has made for some unpredictable trading but having got it wrong last week, I'll try harder for this week I'll edit the post ( if I remember) on Monday , after I have put my guess in, just so that no one is influenced. Not that you'd want to follow someone that has got it wrong 5 weeks in a row

Sunday 7:30pm. I'm going with up. The expanding triangle and the developing RS switch could take us up to 9050 if the move develops that way.

 

[ChartMan]

The first divergence at around 3pm shows the down tick volume decrease, but at the same time there is no increase in the up tick volume- is this confirmation of weakness? OK at 4pm there was an up tick peak but no supporting peaks afterwards, just decline. That I think set the scene for later and the H&S drop where the second volume divergence occured in the up tick vol. This time it was complimented by the increase in down tick volume, supporting the drop to come. Overall , not easy to read with the very thin volume, down at least 50% on average.