DOW - ES Charts 27/01 - 31/01

ChartMan

Legendary member
Little change today, but some violent action that could have proved profitable if you were on your toes. Drop to support on the open followed by an equally rapid rise to resistance then a 200 point drop and out of support before finally settling back along the support line and an attempt at resistance into the close.
A sobering thought for the longer term trader... a single contract on IB for ES futs held for that last seven days would have netted $50,000 :(
Not bad if you can get it..... Do I detect some upside? Maybe, but I'd want to see 8000 then 8100 first before even thinking about a bottom.....
 

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techMark

Junior member
$5,000 rather than $50,000 for a single es contract. Just a slip of the keyboard I would guess. Very tasty all the same!
 

nickerson334

Active member
Dow 30 Support

Yeah, I've had a great 8 days shorting minor resistance 3 or 4 times a day. I'm looking at that for the break at 8180 / 200 and I'll take the back seat for a few days to see where it's going.

Ftse just entered negative territory. I havn't got the DJ Futures up right now but I expect the index will not get the bright start it was hoping for.
 

ChartMan

Legendary member
You might not have to wait long, nickerson.....Without good reason, the DOW turned on 8K and reversed the trend,almost. Closing at the 100MA is the closest it has been for 8 days or so. Now we have to see if this bottom can be consolidated. Staying above the 100MA and closing above it tomorrow should be enough to confirm the bottom reversal.Nice pullback to the old resistance line to become support.
 

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ChartMan

Legendary member
Using a combination of CCI, RSI and PD made for a relatively successful day......
 

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nickerson334

Active member
dow bounce

Hi Chartman

I'm looking to short all the way down to 7000 in the next few weeks due to the unusual political situation, adding to my position every 100 points or so. I'm doing the same with FTSE and long with Euro$.

It's worth a shot with failry low risk for a 2000% profit. It's great to have a few days / (hopefuly!) weeks away from daytrading and if it dosn't work out I'm only that lenght of time behind with usual strategy + a probable small loss.

The main thing is a mobile news alert for when the first bomb hits Iraq as all hell will break loose on the futues / currency market.

If stops are kept tight it's an excellent low risk opportunity with substancial profit potential.
 

ChartMan

Legendary member
I wouldn't bank on 7K, but it's a fair bet. Certainly more chance of that than 9K. Still, for now it's a confirmed bottom and looking for confirmation of an up trend. The bad news is the expanding triangle that can lead to high volatility. In this market that could mean a sizable drop!For now though, we're sitting above the 100MA and common sense says we should carry on.....
 

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ChartMan

Legendary member
Great day for trading the 100MA on the1 min chart. Classic tests of resistance and support as the price touched the 100MA. Final crossover giving two nice pullback to support just below 8000 before rallying up before dropping 30 points into the close.
 

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ChartMan

Legendary member
Nice step ups on the 00's and 05's. An ND top and RS Switch to boot.
 

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nickerson334

Active member
Good information Chartman. If FTSE breaks through 3580 or Dow 8190 / 200 I'll accept that my timing was wrong for a definite movement south and return to usual technical day trading strategy.

I think though that when the U.S. propaganda machine moves up a gear with pre-set daily speeches and justifications for the war, by all leading republicans, the sellers will move in until it looks like the war has been won.

My reseach has warned me never to trade the news although there is an exception to every rule and I think is it.

Is there anyone taking a similar view or the precise oppsite?
 

ChartMan

Legendary member
With the yanks 75% in favour ad the UK 75% against, it's no wonder we're in volatile times. Who knows what effect any particular piece of info will have ? All my observations tell me that given a "bad " piece of spontaneous news that causes the market to tank 100-150 points ( or whatever), it recovers in an hour or so. This war machine syndrome is not spontaneous news though. I would expect , however, that on the first hint of the first bomb , there will be a spontaneous reaction, and an excuse for the MM's to refill their coffers.
 

ChartMan

Legendary member
So much for common sense. Having peaked up a little, the rest of the day went down to support at 7950.Conformation of the reversal was by way of pulling back to the 100MA and failing to make it. So, IF this fails tomorrow, which looks probable, we have a target of 7700.
 

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nickerson334

Active member
Hi Chartman

I'm looking for 7500 - 7700 by the end of next week. If it hits 7500 or so I'll close up and start shorting again if it gets through 7150.

I'm long on Euro v. Dollar, build up to war will send it sky high maybe 1.550.

I admire your analytic skills. When I first started I tried trading complex technical indicators (amoungst other things!) but find simpler indicators holding for 15 mins to 3 hours simpler and more profitable as far as my own reaearch is concerned.

As we both know a profitable personalised technical strategy is not too difficult to formulate it's the mindset that's key and I must admit that 18 months on I'm still not 100% efficient!! Probably 85% now.
 

ChartMan

Legendary member
Another nice piece of TA today. Calling the bull triangle breakout and predicting a target of 8080. Sopt on. So what was missing from a perfeect piece of TA? A pullback to the down trend resistance line. However there was a tiny pullback of 5 points..... Next up was looking out for the target.The rule is stay in above the 100MA UNLESS you see a top. We can see( unusually) 3 minor head and shoulders which should have got us watching closely for a failure, confirming a top. We didn't get any performing until the third one....confirmation being, as always, a break into the 100MA. So now we see a 3 peak ND top forming. The out can be on the second top and that's divergent and as close as you want to the 808 target. No point in getting greedy. :) Waiting would have put you in a dilema as the price hit the 100MA and it looked like the third H&S was going to deliver. Both CCI and RSI formed negative slopes confirming the divergence.
Having got out around 8080, you should have seen the confirmed 3 pk ND top and started looking for the confirmation of a short entry as the price fell through 100MA.That came between 8060 and 8070, with two tiny pullbacks for confirmation. Calling the bottom at 8K had to be a quick decision, in the absence of any real clues although if you had been watching the ES volume, the clues were there.
Playing the breakouts and tops can be very rewarding, with minimal risk.Entering on the tiny pullback at 8010 give a reward to risk of 8:1, the risk being the drop through theresistance line at 8000, the reward being 8080. A lot has been talked about Reward/Risk Ratio in other parts of the BB and this is a good example.Ideal for the Spread Betters. From a personal point of view, these breakouts are so predictable in their price action they are an absolute dream to trade. The risk and fear diminishes to zero...... Like every thing in life, if you practice enough times, you become an expert.... You get to know when a trade is "minimum risk" and when it's a pure gamble. Staying out of those gambles is a hard lesson to learn. I said yesterday that the expanding triangle was a sign of high volatility and that's what we got at the open. If you get that wrong, you just get whipsawed in and out and just as you think you got it wrong and reverse the trade, the thing turns round. Do the 2 or 3 times in a row and you're looking at 100+ points down the pan.
One final thing that's not mentioned naywhere( as far as I know)... The bull triangle... how could I be sure it would break to the upside? Well, you never can be totally sure. BUT look at the action above and below the 100MA during the formation. Look at the area above and below the curve (100MA). Clearly there is more price action above the 100MA than below. I refer to this as the "balance of power being above the 100MA". This gives weight to the probability of a breakout to the upside.
 

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ChartMan

Legendary member
The 10 Min chart tells a story.... We can see an RS Switch on the down trend resistance line leading to an assumption that there is more upside.Possible Inverse H&S with a target of 8120. So 8k now becomes critical.
 

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