Dogpile

surely my way isn't the most elegant but it works: -------- value1=average(c,2); value2=average(c,5); value3=value1-value2; value4=lowest(value3,10)[1]; condition1=value4>0 and value1<value2; if condition1 then plot1(1,"10 abv"); -------- I plotted it at the bottom as a histogram to show a blue bar (value of '1') if the 2 period MA was > 5 period MA for 10 bars then crossed below it last bar.

The IBD 100 list is printed every Saturday. IBD highlights the ones with a black border that are near 'breakout points' -- ones that have some kind of base structure and could launch up out of that. This is a valid concept which highlights stocks that have been in a congestion zone and now ready for a potential directional move. Thought I would follow the 'highlighted' stocks in the list as an 'idea list' to play. I am not a guy who buys breakouts --- I like to buy high relative strength stocks after 'shakeouts' -- not piling into a breakout. This is a lower risk strategy, IMO. This also means buying the first sign of momentum after a shakeout. The IBD 100 is filled with short-term traps -- but the list has many huge winners on it. Thus, I wanted to try a thread to track some of these 'highlighted stocks'. I trade futures and other stocks too so this is not my entire focus so I wanted to keep the list manageable. Filter is to only trade liquid stocks. I am requiring roughly 1 million shares trade per day -- less is ok if it is an especially pretty pattern. Here is the focus list of names for this week: AAPL 167.90 NVDA 36.20 SLB 109.80 AMZN 92.83 WFR 63.08 FMCN 58.00 SII 73.81 GME 57.50 CRNT 16.38 PCP 144.87 ISRG 249.30 Of these, 3 stand out to me. FMCN NVDA GME I would not buy on the IBD 'buy point' fwiw. Just noting the overall pattern of these 3 names looks healthy.

ok, great. whether you call it 'manipulation' or just the natural cycle of buying and selling is just nomenclature. the market has a tendency to surge and then do 'shakeouts' --- its just the nature of a market. sometimes the shakeout is just sideways chop-chop. other times it is hard counter-trend moves to shakeout the weak hands. to me, this is just 'to be expected'... occassionally, you will get those non-stop one-direction type of moves --- but those are the exceptions. clearly, you need to develop rules so you don't get run-over in the exceptions -- but you also need to stay in the 'rhythm' of the natural buy/sell pressure of the market for we are in that type of choppy daily market the majority of the time. Here is a 'Taylor Book' I have been working on and will be forever-refining. http://bp2.blogger.com/_5h-SWVGx6Ms/RxDvHSyj7eI/AAAAAAAAAds/uSz9nHTUmAM/s1600-h/Taylor+Summary+10-5+thru+10-12.png This past week had some Taylor aspects to it. Sticking with a Taylor bias would have made you money and just as importantly, kept you out of trouble. Note that a core part of Taylors technique is to look for 'tests'. Test the previous day low, test the previous day high etc.... I would add to this a common tendency to go test the previous days 'high volume price' --- marked in bold as the number in the middle of each 'bar'. This is the price of peak volume (Peak Volume Price = PVP) for the day. This number very often tends to get tested the next day. Thus, if a buy day, I am looking to go long on a test of the low or a test of a previous PVP. Test means higher low or lower low -- just testing action is what you are looking for. Review for the week: Friday had been a strong up day and the first up day after a downswing. Monday was therefore a 'sell day' -- note this is very, very different than a 'sell short day'. don't confuse a 'sell day' with a 'sell short day'. Monday you would expect the market to get marked up a bit so that smart money could then sell. The day was a holiday though (Columbus Day) and had low volume -- there was a gap down and it was a negative day. Thus, this was not consistent with Taylor but the day was inherently screwed up by the low-volume holiday. Note, Monday 'built lower value' than Friday. Thus we have a down day and the closing 'pinball reading' is 35. Note 'Pinball' is defined by Linda Rashke as the 3-period RSI of the 1 day change in price. Essentially, it is a calculation that, when low, shows that there is underlying momentum in the market --- consistent with Taylors comment about how in an uptrend, the low will often be made in 1-day. Thus, we enter Tuesday on a 'pinball buy'. This is the same idea as a simple 'buy day'. You expect a test of the low (can be lower low or higher low) and you will look to get long. The market gapped up and then tested the low by making a higher low and then surging. This was classic 'buy day' action. Note that the market 'built higher value' versus Monday. Now you enter Wednesday after a 'buy day'. This again is a 'sell day' -- you expect some buying pressure. The market gapped down, tested the previous days 'value zone' at 1567.00 and then traded up. Note that Wednesday 'built higher value' than Tuesday. It was not a classic 'sell day' --- it was a variation on it. The close was < previous day close so this is a bit screwy -- but the play was to buy on a test of the previous days 'value zone' and this worked. We thus enter Thursday with 2 up days -- 2 days of building higher value. Thursday is a potential 'sell short' day -- though not such a clean signal due to the lower close on Wednesday (versus Tuesdays very high close). Thursday the market gaps up big. It builds value at the marked-up level (1581.25). It then attempts up out of that and gets very, very strongly rejected. It tested up out of the 1581.25 zone and drove lower. Thus, this is consistent with the Taylor Rhythm of it beign a 'sell short day'. This is a variation of the 'testing' concept. The market 'tested up' away from 1581.25. This 'test' up was the spot to short on a 'sell short day'. Note that the market did pause in the 1570 'value zone' on the way down before shooting all the way down to 1556.25 on Thursday. Thursday closes with a '37' pinball reading. This is generally a buy signal for ES. Note that both RUS and NQ had pinball readings right near 30. 30 is number Linda Rashke uses in her book. But the S&P futures rarely go as low as 30 -- much more common for more volatile indices like NQ and ER2 to print those more extreme pinball readings. So we enter Friday on a 'pinball buy day'. The play is to look for a 'test' lower and then go long. Well, we tested down but not much. This was tricky action due to the fact that we had just dropped from 1586 to 1556 intraday the previous day. We also 'tested up' into that important 1570 pivot. Thus, this is tricky structure to go long not far under a high-volume resistance zone. The market did close Friday above its PVP, consistent with a 'Taylor buy day'. Thus, we enter Monday expecting buying pressure to continue. It will be a 'sell day' but not a 'sell short day'. Note that the 'sell day' label is really misleading in my opinion -- it really kind of means, 'we expect continued buying but the time to buy was yesterday, not today -- get out into the expected strength and then wait for a sell short day to go ahead and get short'.

Gave FLS a try as a swing trade.

thx jerry, welcome back. yes, 9/20 was a great trading day.

Here are some more examples to get this thread going. Feel free to chime in anyone. First attachment shows common variation to the 2-ROC buy day -- which is actually a sell short day -- Taylor does a lot of this kind of double-speak in the book --- this is where it gets trickier -- but you can go back to the same concepts: The 'Pinball Buy' is the second major set-up Rashke presents. Taylor writes (pg 10): "usually in a strong uptrend the decline low will be made in one session, the low will be made on the Shorts Sales Day, however, another decline will generally take place from this low and the testing of this low will come on the next day, on the Buying Day" The writing only gets worse just after that -- better to stop and just use Rashkes simple 'pinball' indicator -- which is the 3-period RSI of the 1-day change in price. Essentially, you want a nice run of up days and one down day -- you should then look for price action that tests the low and then go long. The test can be a higher low or a lower low.

see thumbnails

In my view, Linda Rashke wrote a book about Taylors book that is much more useful than the original book. Thus, I will try to intertwine the two. Taylor’s method implies that markets move with a natural rhythm that is made up of a buy day, sell day and sell short day. Rashke pg 51: “One of the most confusing aspects of Taylors trading technique is knowing whether it’s a buy day or a sell short day.†--- Taylor would often short on a buy day or buy on a sell short day due to a laundry list of complex rules. Thus Rashke came up with some explicit indicators. concept 1 is the 2-ROC buy day. "On the Buying Day Objective we expect support and we watch the tape to confirm this buying for support and for a rally to start" TTT, pg 9. Here is an idealized version of this 2-ROC buy day concept.

This thread is to discuss the 'count' of the Taylor Trading Technique. For those unfamiliar, you can read about it in George Taylors book or in Linda Rashkes 'Street Smarts' book - Chapter 7 & 8. Rather than discus the technique broadly, which is somewhat complex -- let's just dive into present-day conditions and decide what day we are on and why we think so...

patience patience.... 1 trade, 1 winner... hopefully we can get some good swinging action now.

looks like we have moved out of the muckity muck now. getting away from 1570 was a very good thing to happen -- hopefully will open the range up as we now don't have the high-volume zones in either direction to worry about for a bit.

Dalton talks about this set-up in his book... When a good 30-min buying tail forms a higher low -- that is bullish. The futures market has strong tendency to run stops above or below the recent high/low. This tendency is what makes a lower high and higher low important. If the market isn't even strong enough to run stops above a spot everyone knows there are stops... then that is a message -- we need confirmation by a break below the high-volume 1570 level. That could come in an overnight gap down.... we will see.

looks like a good bull trap late....

everyone take note of the large PVP building at 1569.75 today to go along with Fridays 1570.25 PVP... In the recent past, I have seen some big-time selling tails develop after a lot of churning builds at a single price like this action at 1570.00....

slim pickings in futures. XTO looking good though.

Summary of recent PVPs -- where support can be expected to come in... note by the way that European markets have not confirmed the move up in the S&P's. we are due for a down day and todays gap down could spark a down auction. That said, there is support at the various recent PVP high-volume zones so this might be tricky.

Another good example. At some point, this comes down to feel too -- but here is an example of a choppy stock where you have a big advantage being small and nimble. You enter, if you don't like the follow-thru you can just get out and look to re-enter.

Here is how I traded ILMN. Essentially, I waited to buy until some intraday momentum off of the opening price developed -- sacrificing a bit in intraday location in order to try to catch a 'direct' move. Waiting for momentum off of the opening price means you are 'joining in' on strong buying. I believe that this is the way electronic markets behave. You aren't always going to get a super-pretty intraday bull flag that is going to let you in. The intraday momentum will more often than not lead to a green bar. The green bar starts a potential upswing. You can take partial profits into the initial burst and get a free-ride on the balance. As an independent trader, you have a large advantage here -- you don't have to buy 500,000 shares and incur 3 points of slippage building a position. You can buy 500 or 1000 on a buy-stop with maybe 3 cents of slippage. Others will recognize the pretty chart pattern and the developing momentum and join-in. Even more important, you can exit without slippage whereas an institution can get buried trying to unload the stock. I know this because I used to work for one of those institutions getting buried on abandoned high-beta names.

This thread is to discuss entries and exits for Alan Farleys 'Daily Swing Trade' newsletter stocks. I am a long-time subscriber and find this service to be quite profitable. That said, it is not for the beginner. His set-ups are logical and he does a great job finding names where price has pulled back while the stock still carries underlying momentum soon to either re-establish itself. If you are new, you will learn a lot. If you are experienced, you will make a lot. If anyone wants to discuss some entries and exits for some of the names in his newsletter, let's give it a shot here. http://www.thestreet.com/k/dst/pdf/200710091744.html Recent example attached of a good swing trade offering 2 great swing trades over the last month

<<Do you scan for stocks or are you working off of some "bigger picture" theme?>> Scan. I basically have adopted the 15-min First Cross Buy to stocks -- so looking for a few days of downswing and then some upward range expansion off opening price to trigger. This works well when the market is rotating. Here are a few examples:

<<Why did you think that that level would provide strong resistance given the other conditions you mentioned (b shape, higher value, etc)?>> I was thinking about that Sep 19 PVP and wrongly equating it to the 10/5 PVP. The 'b' that formed low in the 2-day range and 'lack of seller conviction' led me to be cautious about shorting. But the failure to re-test on Monday confused me a bit. I was a day off as I was thinking re-test the high yesterday and when it didn't, that Friday afternoon high looked like an excess high to me (bull trap). But you are right, that played out on Monday and the 'b' Monday profile and higher value being built was not something to fight. I haven't been trading futures much lately -- the real action has been in the sector rotation setting up interesting opportunities in individual stocks.

<<capitalize on the players that get into a strong tilt.>> this is a very significant part of an 'edge' in poker. how do you control your own tilt relative to how your competition controls theirs? do you donk-off that incremental stack or two when faced with adversity? or are you the one gaining that extra stack or two when others face adversity? poker and trading are so similar. playing poker is an excellent way to learn about trading, IMO. learning to control you emotions in a small stakes poker game is much less costly than learning to control your emotions in a trading account -- where the stakes are much larger.

here is what I think I missed today... On Sep 19th, we gapped up after a big move up and then had ~107k contracts trade at 1546.00 -- and this PVP proved to be a major pivot for the 7 successive trading days. This time, the 1570 pvp was actually not a really large PVP in terms of contracts traded there. there were 48,357 traded there on Friday. We then shook out longs with a down day before building more volume high up in the range. As it turns out, getting long would have been tricky today anyway. But this was not really such major resistance to fear. When there is any doubt, best to just go with the daily bias --- ie, when there is no major morning buying/selling tail indicating a reversal --- just trade in the direction of the value migration. If VWAP > VWAP[1], stay long biased. If VWAP < VWAP[1], consider the short side or look for a 'b' type of profile and a higher low to get long.

well, we are building higher value thus far in front of the FOMC minutes due out at 2pm EST. This is a tough spot as the higher value that we are building is bullish but we are pinned just beneath 1570 higher volume area and rejected just under that level this morning. If we break up, consistent with the theme for the day (higher value) -- it might be choppy sledding. If we break lower, then there is some running rom down to 1558.00. This would be consistent with my bearish bias coming into the day. We built a good PVP at 1567.00 with VWAP and price there too. This was a good balancing.

upside move was rejected, back into high-volume zone for DAX