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Gringo
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Everything posted by Gringo
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The question here is whether we are at a level where going long seems appropriate. It is my view that perhaps it's better to wait a little bit until the SL is broken and price proves that the down trend is over. Yes, there is an old support around 150 but it must prove itself before we believe it's still there. I find trading these commodities to be tougher. Their propensity to change direction on a whim is a sight to behold. If you notice on the daily, the gaps are too frequent and maybe trading the futures may be better than these gap prone ETFs. In any case here's some analysis: Focusing on price behaviour around 150 seems appropriate at this time. I am looking for a break of SL and then some test or show of some kind of strength before considering this a buying opportunity. There are those who may choose to enter at the first sign of climax but I've had my share of scares with that kind of an attitude, hence, caution on my part. Gringo p.s. Db, your campaign against the Fx is going to get intresting . Perhaps I'll write something about it later on.
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Yes. You're right. Probably better to not engage in this until price behaviour shifts in favour of the demand. Gringo
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Hi Db, I see your point. The volume is behaving more or less normally. It rises when price is closer to the swing highs and lows. The point which I believe you are making isn't how the volume is behaving with each ebb and flow of price but rather whether there's a significant change which could be attributed to climactic behaviour. The answer is no it isn't; and neither has price gone crazily parabolic, although the rise is steep. Based on this I would conclude that perhaps there is more room to the upside. Strange I didn't think of it myself. Maybe it's time I re-introduced volume back into my analysis. Without it small but valuable clues are unnecessarily missed. Thank you. Gringo
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I am seeing a lot of new threads that are harder to keep track of in the Wyckoff Forum. Having a thread dedicated to Foreign Exchange and Commodities might help in reducing the clutter. My aim would be to do analysis of currency pairs on an End of Day (EOD) basis. JPY has been weaker against most major currencies so was the logical choice. The other currency option to go with JPY was EUR or CAD. 1) Looking at EUR/CAD it became apparent that EUR was a stronger currency as compared to CAD. 2) I didn't stop there. I also looked at EUR/JPY and CAD/JPY recent rise from January this year and the rise of EUR/JPY is greater than the rise of CAD/JPY. 3) Looking at recent price behaviour the EUR/JPY and CAD/JPY are behaving quite similarly but the CAD/JPY is dropping comparatively more. EUR/JPY is showing more strength to the upside as it is already turning up. Based on the above three considerations I have set my eyes on the EUR/JPY as the candidate for a long. EUR/JPY seems to be getting ready for a potential run up. Break above the supply line but more importantly above the LSH is in my opinion the signal to go long. Exit stops could be around 124.42 area and for those with the stomach for it below 122.65 area. Please forgive my errors as Fx analysis is not my regular cup of tea. Gringo
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How does this look as a long? It is a bit away from the base hence greater danger of a reversal. In any case there are clear levels for stops which make it somewhat easier to handle. Price isn't coming down to close the gap. I would look at it as a sign of strength. Gringo
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Someone could choose to go long. Having a hinge so close to potential R gives a controlled and determinable exit point. Also note it is a potential R and might not even act at R hence taking advantage of a hinge so close may be utilized in the even that price just starts going up from here. One's plan regarding how to play a hinge is paramount here. If you have a plan then use it here, otherwise wait for R. The hesitation I believe is visible around the 1710 area (the puny bar) after the first rejection. On the way down after the test this hesitation could have become a hindrance. You in RT wouldn't know whether this hesitation could turn into a rallying point for demand to show up. In hindsight the hesitation area didn't cause much issue after the test for R but was something you had your eyes on just in case. I believe so. Keep in mind this is futures and a 55 point drop is quite significant, perhaps to take some partial profits. However, whether a profit is taken or not is based on one's plan and may not be something you or I would do just because Db might prefer it. Seems logical. Just see what you find comfortable. The objective is just to see price move somehow and bar interval is just a aid in doing so. As always this is an interpretation on my part of what Db might have implied and there's no guarantee that's what he meant. I am sure he'll correct me where I am wrong. Happy trading, Gringo
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I'll check it EOD. I don't want to get sucked into intra-day trading. Preferably once or twice a day observing price to make a decision should be the norm. My intra-day instincts start to pull me in with every twist and turn of price and it's something I wish to avoid. Gringo
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I have exited the USO long calls position. The fact that demand just disappeared at the open and price even after an hour couldn't muster enough strength to rise prompted the decision to exit. As Db had mentioned earlier I had expected price to rise where instead it stalled at the LSH. In the absence of clear strength there wasn't enough reason to stick around. I was willing to lose the entire value of the options but exited with a 23% loss. The extra funds saved could be put to better use! I do understand oil could turn up here and resume but I can make decisions only in the present. I am eyeing the AAPL short if price pushes closer to the 500 level. Gringo
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Tupapa, You are right there is a chance this could be a turning point. There are however other factors at play as well. The way I look at it the price pull back to LSL was normal and didn't really breach it. The strong demand pushed price up to the S/R and current LSH. At the moment price is moving down. A short term trader can use it to short. For a longer term EOD trader the price is simply bouncing in the TR after BO from the large hinge that was shown in the earlier post. Until the LSL is breached I would considering my longer trade time horizon would be reluctant to go short. Nonetheless, the lack of demand to move price above the S/R in your case and LSH is the first red flag and a reason to be cautious for those like me who are long. Gringo
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It's my opinion that both the long or the short are possible. The S&R are our key levels to keep and eye on. Based on whether price has a breakout or a rejection will probably determine which trading decisions is more appropriate. The longer trend does appear to be up and had been taking a breather for some time forming this trading range from 1400 to 1700. Since price turned upwards from the mid point of this range instead of going all the way down to the bottom of the trading range indicates the predominance of demand over supply. For a trader with a longer time horizon staying with the trend and the possibility of a breakout is something to be aware of. That being said a trader with a shorter time horizon could squeeze out some points in case the S&R around 1700 rejects and the the price tumbles. I believe the probabilities favour the long side but price is the ultimate determinant of which side is going to dominate: The long side, the short side or the right side. Gringo
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Hello Ingot, I person using two trades to enter into a complete position but exiting with only one trade won't follow this even or odd trade logic. Same with entering with one trade and exiting with two. At the end of the above combination of three trades there won't be an open position. Your input is valued and appreciated. Thank you. Gringo
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Don't have a futures or CFD option in the account I used. Gringo
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USO today seemed like beginning the ascent. The previous close was exceeded which triggered my buy. USO more or less appears to be behaving like the oil chart posted at the start of this thread. I used a few April calls and the stop loss is equal to the funds put in the calls. Secondary stop in case price doesn't behave well is around 34.4 and below. I am not sure with this amount it's even worth the pain to exit. Nonetheless we'll see how this develops. Gringo
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You are right. The lines don't dictate what the price is going to do. Their use is mainly to better visualize what currently is happening with the price, hence, the lines generally speaking don't have an impact on the market or price. No. Having lines by a bunch of traders has no meaning. The general technical analysis does seem to incorrectly imply as if the lines dictate where the support and resistance are going to manifest and as a result the price is going to either halt around there and reverse because of the lines or will need a powerful breakout of some sort. Here at the Wyckoff forum the lines are used only as a means to staying alert at certain levels where previously price had struggled. If there is no indication by price that a certain level is important then well and good, it isn't. The above talk was about support and resistance lines. Some of your magic lines are demand/supply lines or trend lines. I won't go into the difference but treat them as lines that are showing the direction in which price is moving. One doesn't need lines to know the direction of price but having a trend line is a reminder to stay true to the trend and not swim against the tide of current market direction. Now, you may ask and rightly so, if lines don't have any impact on price what good are they? Isn't it a bit crazy to have something on a price chart that doesn't really have an impact on price? And you'd be right. Lines of any sort have no impact on price, nonetheless they still have an important function for the user. Lines clarify in the mind areas where a potential struggle between supply and demand might take place. All it does is allow one a possible heads up and a chance to enter with a reduced risk. Risk in the sense that the stop could be placed relatively closer in case of an adverse price move. A combination of trend lines and support/resistance lines simply increases the odds of success. The increase might be slight but trading is a probabilities game isn't it? For those who believe markets are efficient and random and human psychology has no impact on prices won't believe a word I have written. For the rest, magic lines if not over done simply lend a helping hand. Gringo
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I stand corrected. Eye opener. Gringo
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Hello LostTrader, I don't see a divergence. Admittedly, my understanding of OptionTimer method is limited but I believe the short term price was to be at an extreme with some divergence in the indicator in the direction of the longer term trend. The indicator is at an extreme but not showing a divergence yet. The price isn't at the extreme but could be considered close enough. Were I to use only the price behaviour for a decision I would consider this position to be unclear at this time. Gringo
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Q's are at the support and for now the support seems to have held. Demand was enough to ensure that price didn't drop down more. Now we don't know from here onward whether the price is going to stay in the trading range or start moving up from here. This does nullify the shorts that were initiated two days ago and even an exit can be made with small profits. This is the essence of reading price behaviour in real time. On doesn't have to wait for stops to be hit as a change in price behaviour itself indicates lower odds of going in a direction. Those who believe price could turn after this bounce and head lower may choose to put stops at break even and then start with their holiday shopping. Price is in a trading range and a resolution either above or below the range will give us an indication of the possible direction. There are some who may play within the range but that requires a lot more effort due to the narrowness of the range. I tend to avoid entries with same risk but limited gain. Now that Q's have found support in case RIMM or AMD or some other stock starts a BO above their range it may not be too bad to attempt that long. Of course make decisions based on the behaviour of the stock itself and run for cover at the first sign of trouble. Sooner or later a nice entry will be caught that will make up for the pain of exiting a few times to protect the capital. Market in the larger intervals is in the middle of 60-70 trading range which makes this the midpoint of that range. Midpoints are the areas where the most trading takes place and as a result a lot of chop, making entries a bit tougher. So stay alert to choppy behaviour or just stay out until price action gives an indication about the resolution of a direction. Gringo
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Q's gave an opportunity to go short yesterday. It is for those who are comfortable with the unknown and alert to changing price behaviour. In case price turns up short gets nullified. Longs are not in the picture until price shows strength, possibly by breaking above this TR. This weakness could only take price down, if it did, to the lower end of this TR. The TR hasn't fully established, the DL was broken and the test failed. This is what prompted the call for a short. RIMM is over extended and isn't near a place where a safe entry could be made. I've had inquiries regarding this stock from those who don't trade that often. It is my feeling that these souls having missed the larger chunk of the move are feeling remorse at their inaction and are itching to do something that's has lower odds of success. If the general public is also thinking the same way it would be wise to stay alert to changes in fortunes of this stock. Price behaviour hans't given a sell signal but for a new entry this is not the place in my opinion. The support from the last TR is around 12.25. AMD didn't show any conviction with its supposed BO and its TR has been increased to 2.45 or even 2.5. With market resting or weakening it is prudent to avoid initiating new long positions. Stay alert for longs, but wait for market to give some signal of strength or stability before jumping in. Gringo
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Price poked above the S/R level but fell back in. In case of a BO to the upside, a long wouldn't be a bad option. So far price is still within the trading range. In case of weakness the lower end of the trading range is a potential S/R level around 64.5. Now if price fails at this 66.3 area those with some heart could attempt shorts. Because it's the second time price is attempting to go above this level the failure could prompt price to test the lower end for demand and even crash below. This is what it means to have less of a price risk but more of an information risk. A long and short are both viable based on the price behaviour around this level. Because of the level being so close to both long and short sides the exit and stop losses are going to be very close, minimizing the price risk. This is one of those time when it pays to pay attention. Which side is more likely? I would give a slight edge to the upside break out. It is due to RIMM breaking out of its consolidation yesterday. RIMM has been leading in price terms the direction before the market move and might be a small clue to staying alert for a BO above. Nothing's written in stone and we judge and make decisions on what price is doing but in case of a BO it might give some the confidence to pull the trigger. Stay alert to reversals after BO and exit fast. For those who are curious below are the charts for RIMM: Another Tech stock showing strength and that broke its downward trend line is AMD. It's consolidating at the moment in a tight trading range and might follow RIMM if there's a BO. The stock refused to drop back towards it's lows and instead started the consolidation with the market. It is no guaranteed it won't go down to test the lows but for now a BO above 2.4 might be reasonable signal to go long. I wouldn't be shorting this in case it weakened. This seems like a fast mover and is low priced so be careful here and manage risk accordingly. Gringo
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Price appears to be in a trading range for the QQQ. The DL has been broken hinting at some slowdown in upward momentum. This does not mean the direction is now down. It simply means price might continue up at a different pace, trend sideways, or reverse course downwards. For now we observer as there isn't much to do until it is clearer which party has the upper hand. I would give a slight advantage to demand side. It's because after the break of DL the price didn't just plop down back to test the lows but held up in there, refusing to budge. Nonetheless, this seems like a trading range for now and while the price is in this range we simply let it be. Gringo
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Price is having some trouble staying above the 66.25 level. Recently it went above for a bit but reversed. It's not a bona fide sign of weakness but a hint to stay alert to any possible changes in this up trend. On the 2 hr chart the DL has been fractionally breached but not convincingly enough to really show weakness. On the dailies the DL appears to be intact still. I am not sure why the 2 hr is breached but not the hourly. Whether there is a discrepancy isn't as important as paying attention to price itself which is slowing down but not enough to exit all longs if one was in let alone initiate a short position. It is time to stay alert as possible signs might become available during the trading day. It is prudent to keep an eye on the breach of 65.6 which is the mid point of the trading range we're in but on 2 hourly chart is the last swing low. Just because price starts moving sideways and breaches a DL doesn't mean it's weak. A breach of DL can be due of the passage of time while price stays within a trading range or it could be due to price dropping precipitously through it. The latter case is when there is chance the breach has some meaning. Holiday season is upon us and I am getting busier therefore, it's a good time as any for those who are casually watching to attempt their own analysis and cultivate the mental muscle that will make them self-sufficient. A lot of screen time is a requirement to becoming proficient reading price movement without the crutches of an indicator. The earlier you start the better the chance that you'll reach the promised land. Here are the charts: Gringo
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Hello Jimbo, Do you believe it is the retail traders providing support on dips? Gringo
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Same chart without bars: Gringo
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Price has retraced about 50% from the 70.5 to 61.3 drop to about 66 area. So far the the trend is up and DL is intact. Immediate level of potential resistance is around 66.25. Nothing much to do other than observe. Notice the rise has been quite steep, which in bear markets is the norm to get shorts to exit, excite the public and inducing them to buy. Later the price fizzles. Do we know if this is the case this time around as well? No, we don't so we keep our eye on the trend and for any weakness in case it develops. Gringo
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Price was dropping early in the morning and then reversed with quite a vengeance. Those who had gone short probably had to cover their shorts and exit. Now the situation is a bit tricky. This could very well be a retracement and a subsequent rise that we talked about earlier. Although the speed of which was such that it caught me off guard and I couldn't conceive of going long so quickly. As a day trader I could see the rise but even at smaller intervals it wasn't the easiest to pick the bottom. Probably those who use ticks might have caught it. I am digressing here. Coming back to the 2 hr chart, the price went as low as the gap but didn't close it. It went up and is currently above the last swing high (LSH) of 65.5. The way things stand the probability of further price rise has increased in the light of today's activity. This of course doesn't mean the down move is out of the picture but shorting as long as price is above 65 to 65.5 has become riskier. Price has also made a higher low and risen above the LSH turning it into an uptrend. Price is at the mid-point of the trading range (TR) from 65-66.25. Generally speaking the mid point is the place where most of the trades take place hence a lot of up and down movement. Most of the times it's not advisable to initiate a position around the mid because it's the average and price keeps coming back to it after going from one extreme of the TR to the other. From here only a long seems viable if price continues up and short is not in the picture unless some kind of a weakness develops to clearly show price having problems going up. So far that hasn't happened after BO from the red trend line. Those who use indicators, especially indicators that rely on price to revert to the mean are probably in some kind of trouble. Price hasn’t done much of reverting and seems to have changed direction to the upside. This can lead to serious losses especially if one holds onto to losing positions as the price looks even better as a short the move it goes up and away from the mean. Eventually the desired turn might come but after how long and after how much emotional damage? Those who rely on price hopefully realized their mistake faster and exited when supply/demand showed balance shifting to the demand side. It’s not an easy job by any means but those who entered two days ago at the break of DL from the 2 hour chart, would have exited at worst at break even when strength in demand showed up. The daily chart has a visible DL which now is our guide to prevent us from premature shorting. The weekly is showing price reaching the mid of the larger trading range. As stated earlier the mid is an area where a lot of activity and directional changes can take place. Weekly is quite clear and price simply bounced up from support. The options after exit or for those who were waiting for the rebound were tougher. Because of the speed to the upside, and lack of drop in price, it was tougher to hop on the bandwagon to the long side. When the LSH was exceeded by price to the upside, it could have been taken as a sign of strength and some longs initiated. I congratulate those who had the sense to do that. This kind of price behaviour has taken place in the past. At times it is due to real demand and at times it’s short covering by those who got caught on the wrong side. We don’t know which one it is this time around. In this environment the prudent thing is to either be long or stay out. Also keep in mind that 65 could turn into a potential support for price. If there is real demand then price might rest a bit within this TR and then propel upwards. On the dailies you can see it was a V bottom from which price rose. These are hardest to catch due to their speed and lack of a test for further confirmation. It sure is fun isn’t it? Gringo
