Dow Intraday charts 09/06 13/06

ChartMan

Legendary member
5,580 46
Quick look at the overall picture now on a 10 min chart.. The up channel is now over. What comes next? We will get either a pullback b wave or a complete channel down. To get a divergent bottom will have to a few more days of down. RSI usually takes a few days to deliver a positive divergence and as yet there is not a sniff in CCI.
 

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ChartMan

Legendary member
5,580 46
A nice day for the bears. Having suffered so long they must have thought it was Xmas early. :)
A nice simple entry as the price pulled back to the well etablished old uptrend support, now clear resistance at 9045. Trading short under the 100MA would have kept you in all day for 60 odd points. Not overly exciting. Could you have traded the bear flags and made a few more point? Not easily........ Clear enough in hind sight but by the time you've decided that a pullback is a bottom , closed and reversed, it would have been time to close and go short again, IF you were lucky. Think about it.....
 

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ChartMan

Legendary member
5,580 46
It's important to have an idea of where the dow might be heading now. Having broken the channel, it could be that there is now a parallel up channel forming, which is quite common.Or it could be an abc correction, in which case we can expect down soon.Dropping 9K would signify that.
 

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ChartMan

Legendary member
5,580 46
Really sorry , but no time for a long report tonight.
Notice the 100MA pullbacks, and the10 min chart uptrend support bounce. This line is extrapolated from the previous slope and runs parallel to it. A great rule of thumb for second guessing where support may be. In this case it was perfect ( it very often is). Notice too, the T2 failure, the target being 9064.
 

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ChartMan

Legendary member
5,580 46
Channel formation is now clear, giving a more solid support line. To me, the drop has just been a correction, and we're staying wth the trend.
 

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ChartMan

Legendary member
5,580 46
Nice easy day today, re establishing an uptrend channel with a correction. Good test of the 9K line, finally resolving to the upside to confirm the trend.I guess another day in positive territory will seal it. Closing at the high of the day adds strength to the argument. Apart fropm that, not a lot to shout about,save to say a long at the open would have bagged a leasurely 140 odd points, holding all day. Would I be tempted to hold overnight? Just.........on the basis that we are likely to break into the old higher channel. Just note the action around 9064 and 9164. A common place for a pause or a test of support/ resistance.
 

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ChartMan

Legendary member
5,580 46
Continued compliance with the new channel adds confidence and strength to the res. and support lines. Two things tonight.
The double line across the opening Inv. H&S. The lower line delivers to target. In doing so a second higher line is formed, with a common left shoulder.This RHS was at 9164- what a surprise! Clearly this second line doesn't continue through the target of 9194.So we decline. In doing so we get a bull flag with a target of 9250- clear failure and down we go.
Second thing- a perfect positive divergence with an RS Switch. Look very carefully at the RS Switch and how to recognise it. The rising RSI support line HAS to start BEFORE the intersection. At some point, the downtrend resistance line will intersect the uptrend support. At his point, RSI SHOULD test this line for support at least once.This is the most powerfull bottom I know. Don't laugh. :)
Remember you need 3 things for the perfect setup, as described. All good things on the DOW come in three's. If you want that final, final confirmation, go long on the FIRST low after the switch where RSI DOESN'T drop to the support line. This is at 9140 ROCK BOTTOM. You won't always get the perfect low, but you will be close AND safe.
Oh, and my overnight long paid out. One of the rare occaisions I have had the courage of my convictions. I can't condone holding overnight so don't take the chance. If you must feel tempted, take a 1/10 th stake and treat it as a pure gamble after a good day- one for the road if you like.
Looking at ES, a breakout of 1000 leads to 1030/ 9500 on DOW.
 

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mombasa

Established member
561 1
Hi CM,

Been a good week for me so far (well risk wise if not points wise) since I decided to keep things simple and follow the +/-20 100MA rules (especially for entries).
I missed out on the big opening moves on tues & wed (in meetings :( ) but am still up 61 points.

Not sure my entry / exit points were ok yesterday. After missing out on the opening, I went long at 16:10 after dow had moved +20 above MA and then bounced back off it (9180). Was this a good entry or not? It wasn't your classic pullback (didn't spot the H&S at the time, so I guess it wasn't a decent entry - even though it failed?).

Stayed in till 18:17 and closed when the H&S formed - and went short before dow crossed 100MA to the downside - stayed in all the way to the first PD at 19:14(decided to close 'cos I had to go home then). Was my entry good here, or should I have waited until the MA cross?

Think i probably know the answers here but it would be nice to hear your thoughts and criticisms :)

Thx.
 

ChartMan

Legendary member
5,580 46
Nothing wrong with 16:10 entry except that there was a possible H&S so you should have waited...But waiting was no good either.... take my note about the Inv. H&S second target failing too...that should have made you cautious.

The long exit was a good call.
Early short paid off for you- sometimes they do, sometimes they don't. Exit was excellent, you bag maximum statistical profit, minimum risk.
The short enrty meant making a quick calculation on the target for the following Inv. H&S which failed.
Well done on your 61 points. Don't get carried away and think you've cracked it! :cheesy:
 

stoploss please

Established member
780 10
Hi

I am trying to trade the Dow on hourly charts. Does anyone know the best setting for the RSI in this time frame. Also, can I ignore the trin and tick if I am dealing on hourly charts.

Regards
Andy
 

ChartMan

Legendary member
5,580 46
I'm not convinced there is a "best" setting for any indicator. Start with 14 and try it out....Tick and Trin? Use them if you like them and understand them.....
 

ChartMan

Legendary member
5,580 46
Nice day for the shorters. Channel support lost around 9120 . Staying short under the 100MA was a good play, exiting on the 2nd or 3rd low at 9080.
 

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jonnyy40

Experienced member
1,329 11
Thanks

More interesting stuff chartman,you're helping me a lot. Please keep it up, it's appreciated.
 
 
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