Getting Set To Move Higher

bigblue

Member
Markets look set to run up much higher next week as the VIX has broken down short term and is on its way to 24/5. Great chance to trade the S&P 500 today with a Stop at 893 looking for 950 for openers.
 

FTSE Beater

Experienced member
hmmmmm.....well I'm going the other way (just to be different), playing for the H&S formation. :)

Two ways to trade the same instrument, :) but as always my thoughts come with a public wealth warning :D
 

RogerM

Established member
The chart message looks ambiguous to me. The question for those of us who both write and buy options is not only which direction, but over what timecale.

We have been in a trading range for the last 6 weeks, and all trading ranges eventually break - that is their nature. So until we break thru the top of the range we won't really know. Markets no longer seem to sell off on bad news, but neither do they run away on good news. This seems like conditions that favour a period of continued consolidation.

The consolidation can be interpreted as a bull flag, which gives a target for the ftse100 around 4450 (also the resistance level of the August highs), but the clue will come if the ftse breaks thru the top of the current range at around 4225. If it doesn't, it could remain range bound. What will happen when Saddam starts to play silly b****** (as he surely will) and Dubya can't contain his anxiety to get stuck in?

The rally of the last few days could just as easily be an attempt to take money out of the very heavy exposure to puts in the run up to yesterdays expiry. But equally fund managers will be desperate for their funds to start showing a profit (or reduced losses) and will be terrified at being left behind in an end of year rally, so may jump aboard anything that moves in the right direction.

A break down thru the bottom of the range will complete a H&S top, but you MUST NOT jump the gun on these patterns as they have a very high failure rate. A failed H&S would actually be very bullish! And a break out tru 4225 would complete an inverted H&S with a target around the 4800 level, which is above the August highs and very close to an important Gann level.

Interesting times! We could have a big move in either direction, or continued consolidation - which seems to cover most eventualities. :D
 

Attachments

  • mike20021013a.gif
    mike20021013a.gif
    35.3 KB · Views: 1,172
Last edited:

Riz

Experienced member
vix quite weak, last time it fell to 30 in august 22nd dow hit 9k...this time its falling while the market consolidating and range trading, looks like a b/o is due taking dow to 8775 then 9k..if fails to do so alternatives could be the h&s shaping up on dow daily with a target of 8.2k or further range trading which is less likely considering the tension and nervousness in the market, it should break soon one way or another
 

madasafish

Well-known member
Attached is a Dow daily chart with stochastics at the bottom.
Note how stochastics have turned up and the 7 day ema (blue) has remained over the 13ema (red) since the rally began in October.

Alos note the chart background colour has now turned green showing an upturn is underway.

Also note , hiwever, that we are at resistance from October 21 and if wqe fail here, there will be a clear head and shoulders formation.
RSI (not shown) has turned down (the big yellow arrow) on Nov 11th and until it turns up (a big blue arrow) the rally will not be confirmed.

Answer: I dunno from the chart. Personally I think a weak XMAS rally.. but trade what you see etc.
 

Attachments

  • dow.gif
    dow.gif
    29.4 KB · Views: 1,125

ChartMan

Legendary member
Vry true, Roger about the H&S failure being bullish, especially on the dow .... WRT the DOW , I'd say a failure was a bankable event.
 

Naz

Experienced member
Here is my input.
I've always liked looking for market directions by checking MSFT.(some old posts appeared in market chat) I've attached a daily and 60 min chart in this post.
Like a lot of things MSFT likes working off fib levels and whole numbers,in many time frames.It also likes responding to t/a in general.As soon as it gapped to $57 i thought there's gap to fill.Which happens to be a whole number and a 50% fib level of the last major move up in the 60 min chart.One never knows how it will do it but it duly obliged.The Friday move was another great 50% retracement in its 60 min trend.
For me i'm for ever checking MSFT because its the largest stock in the Nasdaq 100 and i always reckon the Nasdaq leads and the world follows ;)
So the interesting thing now is the daily chart on the left.$57 is its 50% retracement from its high of this year to the low of this last move up in Oct.( I realise that where you take your fib levels is subjective for everyone).No one knows what will happen but i shall be watching that level closely.If it breaks i think were going to $60 at its next fib level and the market will be going up,but if it cant get through. $52 is the 38% retracement of the last major move that started in October.
 

Attachments

  • msftv.gif
    msftv.gif
    21.7 KB · Views: 1,000
Last edited:

ChartMan

Legendary member
Nice chart NAZ. It shows one of my favourite bottom formations- the "W". This has great potential on a confirmed break :) Roll on the rally.......
 

dellboy

Newbie
hello to you all i am a new memeber, i would like to say its great to read so many differing opinions. mine is that in order for the market to move higher the dow would have to take out the nov 6th high of 8800 which is key resistance and the s+p would have to take out 925 high nov 6th. only when these level are breached will the market be able to attemp a rally 9000. my personal feeling is the market will struggle to beat the previuos nov6th highs i mentioned. the dow and s+p have formed ascending triangles in the 60 min chart which is a bearish signal i am not saying mkts cannot move higher in the near term, but in order for the us mkts i have mentioned they need to break above the nov6th levels which i do not think they will do my personal opinon! i actually think there is a chance the next move down in this mkt will start this week, as i see nothing to support the view that this is a change in trend but another bear market rally about to come to an end the rally from october 10th has risen on a divergence of volume and momentum to the prior rally, which is also supportive of this bear market argument. anyway this is my view and i am trading the mkts with this view in mind hope this offers some help to the people out there. warmest regards to you all.:d
 

neil

Legendary member
Dellboy

Chartman, Naz, madfish etc will tell you that TA is not predictive - therefore wait, then trade what you see - not what you think.

In other words - if you think there is going to be a breakout, wait until it happens - don't pre-empt the move.
 

ChartMan

Legendary member
Yes, good reminder , Neil. Delboy, there is only one worthwhile reason to consider a "prediction"- by anyone.... That is simply to be aware, make your own plans as to what to do IF it happens.
Take someone's prediction and act on it per se and you will soon have an empty pocket. :(
 

bigblue

Member
The next Bull move looks to be under way and the stop at 893 on Friday in the S&P looks spot on in retrospect. Trading higher again this morning, I'm expecting fireworks.

I don't look at any standard technical indicators, I use my own system of analysis - A Harmonic Grid - if anyone cares!

This week looks to have an exceptionally high chance of producing outsized gains across all the major indexes.

Bon chance!
 

dsmodi

Established member
Bigblue,

I've come across the Harmonic Grid before.... It seemed quite interesting. Any chance you could post the chart you've out together for the DOW, and maybe even S&P500 and any other indices? It would be interesting to see how the grid fits in for the bulls - particularly as I'm bearish....

Many thanks in advance....
 

bigblue

Member
dsmodi, yes i see you have registered at the site, I don't post any current charts because my clients would rightly be annoyed as they pay good money for them. The site will be up and running shortly so be sure to come and visit.

The site is split into 3 sections

The Advisory Service, aimed at Institutions, Hedge Funds & High Net Worth Individuals, is commited to the timing of global financial instruments utilising the Harmonic Grid (TM). Clients receive timely recommendations and planned levels of entry for instruments associated with the modules they elect.

The Members section of the site is designed to offer retail investors institutional style analysis at a fraction of the cost. Members receive the recommendations made via the Advisory service on a delayed basis usually between 7 and 21 days after it is first released to clients. Although the absolute points of the trade may be missed this analysis is valuable because it will still indicate the prevailing trend and exit points for each trade. Software, enabling direct access to the Harmonic Grid is available for lease to individuals by application at the discretion of management.

The Registered Users section of the site is designed to gather and display a body of evidence to support the efficacy of the Harmonic Grid (TM) as a market timing mechanism. Here also, one can learn about the technique and access the recommendations made to clients on a delayed basis of 180 days.
 

Naz

Experienced member
If anyone is interested.I attach a 15min MSFT chart showing my entry point on Friday.Reason:We had just had a 50% pullback in an uptrend,it held during the lunchtime chop,now looking for the afternoon move which started when the futures started running and MSFT broke out above its Whole number $56 resistance.
Yes i trailed my stop using the level 2 screen and had my exit order eneterded on island at $56.80 all the time during the run,letting the market run into the order,therefore selling on the ask and paying no spread.
My initial stop was 25c underneath my entry.The reason i picked $56.8 for an exit was that with an initial 25c stop,a 1/3 risk reward gives an exit at $56.8.
Risk was $250, reward was $750 and costs were $26 giving a total profit of $724 for the evening trade.
Placing the exit order on island during the run also takes away the greed and fear when deciding to get out.All of a sudden you just see the execution and your out without having to think about it.
 

Attachments

  • msftj.gif
    msftj.gif
    10.1 KB · Views: 721
Last edited:

dsmodi

Established member
bigblue,

aha! so u must be "The Mr. Anthony Morris" - we've actually spoken on the phone as well....

I take your point about not being able to post a chart to protect your clients interest - fair enough.... but if you do change your mind as it is just one chart, and only this one time, then i'm sure none of the rest of us would even whisper to your clients that you've posted here..... <nudge, nudge> ;) ;)

....
:)

P.S. BTW - congrats on the baby!
 

bigblue

Member
dsmodi
You got me!
Thanks for the congrats!
That baby just turned 1 on 14th Nov, walking already, cutest thing on two legs! Totally smitten.
I really can't post current charts, sorry, but at least you know who I am and what I do and will just have to trust me that I am relaying what I am seeing via my analysis.
 
 
Top
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock    No Thanks