firewalker

I just found the article interesting, and also from my personal observations, equities and oil seemed to move along in the same direction. What happens after hours or premarket is a different matter... Btw, "zero" correlation is unlikely too I'm sure there are plenty of people out there who keep track of how markets are correlated and are much more knowledgeable on the subject than me...

Well it depends on what your focus is on ... but take yesterday for example, when US indices opened, they rallied up, so did oil. Then later in the day they fell off quite a bit and fast, and at same time oil reversed and fell from above $81 to below $79...

Well it remains to be seen, but during 2009 the correlation between oil and indices has been quite outspoken. This does not mean that when equities move up 10%, oil moves up the same amount each time, nor does it imply that if you superimpose both charts you see identical patterns. Correlation needs to be analyzed, and I doubt you can just say "that time has come and gone". Here's an interesting article about the remarkable correlation between oil & equities. It's as recent as from August: FACTBOX: Oil, equities trade at their closest in decades | Reuters

... and I second that!

There's another program which you might like, and it's called TradeMaven. When I used it (long time ago), it was free, but it looks like they still offer a 30-day free trial. You could play around with it, replay all day or a selected time. The great thing about it, was that you could fast forward those times where you don't trade (for example lunch time), and slow down or pause your focus points.

I'm not the person best suited to tell you where the 'best entry' was, but I think there were a couple more opportunities to short. These happened later on but, for those (like me) who were not comfortable shorting so soon off R (after such a sharp rally), they worked out reasonably well. At 1605 (the time on the chart) volume spiked up noticeably but there was no follow-through. You could acted straight away, but since price was still rising I waited for it to stall and you could've shorted on the way down when volume picked up (small red dot). I say "could have" because I didn't... My short happened later on (big red dot), when price consolidates for about 15 minutes it seems to pause. I've waited to see what happened and when it fell out of this downwards, I was in with a 3 pt stop. Because of the speed of the drop, it was a matter of seconds before moving it to break-even. I think this was worth mentioning because I see a lot of people trying to nail a trade off the extreme, but when they miss it, they quit or they stop looking for other opportunities. And that's perfectly fine, but it doesn't automatically mean there'll be no high probability trades left.

Overnight action doesn't exactly make things much clearer for me... I'm looking at the 53-55 zone for a potential short, and 1742-44 as potential S. But I hope we're not restricted to a 10 point range ...

Given the choppiness around what looked like S at 40 last week, I am now considering 25-54 as the new range now. The area around 25-28 was also important the last three days of September, and although it looked like 30 was the extreme, I tend to believe that shifted now. At the moment when I'm typing this, we're back in the middle around 42 after reacting off 25 premarket. Therefore, unless there's a serious rejection of R in the low 50's, I will prefer to go long if the market breaks higher.

Thanks for the story. But I think the Bohr part is turning out to be an "urban legend"... Niels Bohr / On Being a Student snopes.com: The Barometer Problem Take nothing for granted, even if it comes from dbphoenix fire-"pedantic"-walker

There was no particular reason for me to post any additional charts yesterday because wj had already illustrated perfectly what I was looking at. As he said literally: short 30, long 13. He didn't say anything about taking trades in the middle, so I'm surprised he did, but then again he's free to change the plan as the day progresses and as you say, that way people can compare "what they did with what they thought they were going to do." From my point of view however, I felt no need to change my plan intraday let alone add anything to wjrusnak's post, as taking a long from the zone around 13 (or short around 30, in case we opened there) was the only thing I was looking to do. I thought it would be interesting to compare the reasons why several people entered long at 13, especially since some got stopped out for a loss, others breakeven, others ended up with a profit, yet almost everybody was looking at the same thing. If you feel that analyzing the "why" of the trade, rather than just the "where", you are free to move my posts to a thread better suited for that particular goal.

Like I mentioned in the chatroom, much depends on how you view the market of the last couple of days. For me it was obvious that price broke support at 1713 (this morning in my timezone). When it fell down further it stopped not at the next support level at 1700, but in the middle at 1706-1707. A similar thing happened last week. The people missing the breakdown would then anticipate shorting when price retests previous support, turning it into resistance. (and in fact I took such a short earlier today, but it got stopped out breakeven). As you can see by the premarket action one hour before the open, price failed several times to get above 1713-1714. However, on the open we rose almost ten points from there, after slowly drifting higher. This brought us back into the highest range, therefore negating any shorts. At least for me. When price falls out of a range, fails to attract traders, and gets back in the range with relative easy, it very often goes to test the other extreme. Obviously this is no rule of thumb, but considering the uptrend, and considering the fact that something similar happened last week, I think it was warranted to consider long trades as having the bigger potential. As for the congestion, I can't really comment on that since your entry signals are probably a bit different than mine, but I thought you used volume as a confirmation signal. So I wonder if there was a sign in that congestion we were going to reverse that perhaps I missed because I wasn't look at the 5 second all of the time. What surprises me actually is that you seem to enter how or at least "when" I did in the past, rather early, which often leads to a very sharp entry and quick break-even. In this I think waiting for the suppyline to be broken (see chart), gave more confirmation for taking a long entry. But you could also argue that if you wait for that to happen, you're already a step behind. Which is true, because many times I've seen you guys mention the TICKQ divergence before any S/D lines are breached... The rest of the day doesn't exactly make it much clearer for tomorrow.

Well, from what I can see you made two shorts which were not part of the plan. Did you compare this to what you posted this morning? Quote: "So, for the game plan: No different than friday, short 30 long 13." Hmm, it looks as if you got stopped out at the exact low. Which makes me wonder when exactly you entered. TOG and myself entered at 14, which was not the best entry possible, but we entered when price bounced off the level. Unless I'm mistaken, it seems as if you entered when price was still falling. Can you confirm? I've attached a 5sec chart, with the blue dot marking where I think you went long, the first black one my entry and the second black one where I think was the entry with clear confirmation as buyers stepped in (not that visible on the 1 minute). After that price went up to 1719 and did come back as low as 1714.50. Basically 0.50 made the difference there between a decent profitable trade and a zero on the screen... Actually, I had only contract left when price hit 1730. So I can only take half credit, because there was no clear exit signal yet at 1730, although price cleary confirmed resistance, buyers still managed to push a few points ahead. Technically, I think staying until price broke the trendline, and fell back below the last swing at 1728.50, was the correct thing to do. Moving or not moving my stop to breakeven, has been a huge determinant in my P/L... I've added my chart from today, left all the lines on there that I drew during the day, so you can see what I was thinking at that time. The orange lines make up for the hinge, and although at the blue dot I had a scale-out signal according to my strategy, I stayed in because volume was light on that break and I thought price might re-test the midpoint of the hinge. After it continued to 1722.75 and make a higher high, I drew a trendline with a flatter slope. Had price returned all the way to my entry point I'd probably ended up with little more than breakeven. Looking back at the trade, I still think I got a bit lucky with price retesting 1714.50 and not lower. Most days however, I'm not that lucky...

I agree that yesterday was interesting, and particularly nice in terms of price reacting to S/R, but you are leaving out some details which in real time make the difference between some decent profitable trades and a couple near-breakeven trades. In hindsight this day looks very easy, but in real time playing those reversals demands an aggressive approach, if you are getting all-in, all-out. Not trying to be pedantic... For example, exiting completely at the break of a demandline, is the exact reason that most people get out far too early in a trending day. Obviously when price first breaks that DL you don't know whether price will get stuck in a trading range, or just hover sideways for two hours and continue on it's merry way. The magenta dots on the chart are points that I think are realistic exits. Let's take the trade with the magenta arrow where one could enter a short. You stay in till price hits the opposite of the range and exit half there, or you stay in and draw a new supplyline (magenta). You then see price net getting passed the midpoint, so you move your stop above the midpoint and you wait to see what happens next. Price touches 1688 again on lower volume, so you scale out there, but whatever is left of your trade doesn't get a clear exit signal until price is back at 1693 (second magenta dot), which is only a point or two away from your entry. The test on lower volume on what wjrusnak mentioned as support (1688) seems like a classic W-setup, so no argument there. But the lower volume after the climax near 1698 doesn't mean a "get out completely"-signal imo. If you read from left to right we see price jumping to 1694 and then from 9:35 to 9:38 price creeps upwards but volume takes off: there's not much selling going on, price is pausing. At 9:40 price breaks higher to 1699 but falls back immediately and price again takes a breather and starts to move sideways on lower volume. All of this also happens above the premarket high of 1695. Again I don't see a reason to assume price is going to reverse, but we did move 10 points in little time, so some sideways consolidation is to be expected. It is only when price breaks back below the horizontal magenta line that you have a reason to scale out again (after perhaps scaling out at the demandline break). However, if you had 1700 or thereabouts noted as potential resistance from the past (a level that has been mentioned in the chatroom several times), that climax + the reaction on lower volume meant a lot more. Otherwise you are just looking at volume in the middle of nowhere and that "multiple top" at 1698 doesn't mean much, if you consider that (1 price is still making higher lows and (2) demandlines are very often broken quickly, especially when they are that steep. What I'm trying to say is that long, short, long in theory was the best thing to do, but I doubt many people would've traded like that in real time. Because once you have a profitable trade on, most of the time you rather manage it, then exit it and take a new entry which comes with new risk and new uncertainty.

Well 50% retracements are common in each timeframe, and when price dropped from the all time highs to 20000-ish, it bounced about half of the drop there too. I don't see that much evidence of other levels though, they seem to be crossing price at random points. In any case, it looks like we are at an important juncture.

With all those 'gaps' it's like trying to put a puzzle together but not knowing how the end result should look like. Zooming out to the dailies however, it looks as if we find ourselves at an important level, likely to offer resistance (around 21000). I'm not sure what you mean with zones that can be "quite big" but if the market moves 500 points intraday then S/R congestions will most likely not be 10 points or a straight point. On the 15-min chart I've drawn two areas where I would expect price to find support or resistance and those zones are about 50 points wide. The line in the middle is the midpoint of that area and doesn't necessarly have to mean anything, but price does seem to be turning from there several times. If you plot volume by price, I think you'll get a clearer picture.

I found this post on "Re: What Would Have Been a Good Way to Trade Today (monday 7/27)" interesting and have nominated it accordingly for "Topic Of The Month July, 2009"

Yet again the same zone mentioned in chat yesterday (originating from last Thursday, 1600-1602) provided resistance early this morning (morning in Europe that is ) Price drifted downwards and although it took 4 hours, we are back at 1590 now, which is where I'm closing the short and calling it a day. 1590 will most likely be of interest to the traders of the US session. Should we turn upwards again (which seems rather unlikely imo but one most keep an open mind), price will most likely start its reversal here.

Now who will be left to take a piss at? I hope all the pieces will fall into place sooner rather than later. In the meantime, good luck!

I don't think it has much to do with being a novice. There are times that price is drawn to a particular S/R zone like a magnet, or that price bounces off such an area exactly where you anticipated it would happen. But it's not because you have identifying S/R beforehand that price always sticks to exactly what you thought is S/R. If it doesn't act as S/R, you could say it isn't (or not anymore) or your interpretation wasn't correct. When I face a situation when price chops around what I perceived as important S/R, (sometimes stopping me out on both sides), I try to stand aside and evaluate from a neutral point of view. Some people are better at reading the market in real time (than me) and when the pieces of the puzzle don't fall exactly into place, I become confused, make mistakes and lose money. It's not necessarily a bad thing: recognizing the condition under which you don't perform that well, is imo an important factor in trying to trade profitably. One other option is to look elsewhere for a setup. For example, I had simular thoughts as yours with regards to identifying clear S/R on the NQ and reconciliating the overnight/premarket action with the intraday. However, I also track the ES and I noticed we had established a decent resistance area around 955-956 where price stopped each time the last couple of days; but each time setting a higher low (increasing the odds for a breakout). This isn't about the ES though. What I'm trying to say is that I found a more attractive pattern there, and left the NQ alone (at least for today )

Or: consider your options beforehand, know what to do and how to act if you are faced with a choice, and don't hesitate to long or the opportunity is gone. Sounds familiar

I agree that most traders would be looking at that area to take trades, but before "thé trade", were there not several other (some more aggressive than others) signals to enter long? Or did the TICKQ not provide confirmation on those occasions?

There seems no stopping to this straightforward stair-step trend. Intraday traders almost seem at a disadvantage (having to find re-entry points)... So far we are up +/- 10% in one week, from 1400. NDX is again the strongest, making new YTD highs, bringing us back into October 2008 territory. I'm looking at 1555 and 1600 for potential areas of resistance. Lines on the chart are the same as posted on Friday. Breakout and retest from 1519-1520 led to another bounce and continuation.

A fly on the wall experiment observes neutrally and shows everything so that the viewer can form a picture of his own. Reality TV selects certain moments, magnifies them and directs the show in a certain direction. If you call that programme a 'documentary' by all means, but it's not. Besides, comparing the results of someone who's trading a handful of stocks with someone managing a hedgefund...

The fun is starting early again (seems to be the case lot of the days lately). I'm in from 1508. Good trading!

Strangely the majority of traders on this forum found the "worst market conditions for a generation" a lot more profitable then before. As for 'fascinating', I disagree. Half the time they were repeating what already was being said, there was more focus on the ego's of some people than on the actual trading, and viewers didn't learn a single thing about what trading is actually about. The only thing brought to the viewer's attention was a short explanation of what it means to "short a stock". The series focused primarily on interactions between people, not in the market. Which is fine, if you're into the kind of reality-TV where who said what is more important than what is actually going on, but those who want to watch a show about traders are probably more interested in what trading is actually about. I agree with atto, reality pulp, not the trash usually aired by commercial broadcasters, but still below the general level of a BBC documentary. Warning: spoiler @uexkuell: If I remember correctly, the end result was that the best trader gained about 1-2% in that month.