YM, ES and DJIA Analysis

[trader273 10]

Here's my take on the Dow:

 

[james_gsx 16]

The bulls have had plenty of chances to rally, and can't seem to do it. Overall it looks very bearish to me, which is why I exited my position flat today at break even.

 

Yesterday we had a doji after a rally, followed by confirmation today with the move lower. I think we'll test the 1325 area soon, and if that holds we could move to 1375. If not, back to the lows we go.

 

[trader273 10]

James,

I see those more as minor support/resistance. It looks like on the daily chart that price just kind of went back and forth around those levels. The levels I show on my chart are taken from the weekly chart. I think it is easier to see the SR levels on a higher time frame. But that doesnt mean to ignore the minor SR levels. Depending on how long you are looking to hold a position those minor levels could be very important.

[james_gsx 16]

Inverted hammer, where the wick touched resistance. Might be over with the retracement and more selling pressure from here. The more I look at this, the bulls have had plenty of chances for a strong rally, but they can't get it done. That shows a lot of weakness to me.

 

 

[james_gsx 16]

Hmmmm.... what's everyones thoughts on this candle for the monthly chart??

 

 

[smwinc 20]

200 point rally in the DAX, all my Christmas's are coming at once!

 

That monthly chart is something worth sticking up on your wall.

 

(yes, I am bullish).

 

I've been "collecting" knock-in & deep OTM options. tasty treats all around.

 

Don't get me wrong, the world is still "broken", but these short-squeezing rallies are delicious. NFP this Friday will be interesting.

[brownsfan019 17]

ES from 4-2-08:

 

 

 

I really like this from a risk/reward standpoint.

 

We'll look at 2 possible entry points and see how it turns out:

 

1) AGGRESSIVE: enter now at 70.50, stop at 80.25

 

2) CONFIRMATION: place sell stop at 62.75 (one tick below low of spinner), stop at 80.25

 

Profit targets:

SHORT-TERM: 1321.25 (low of WRB and also a previous support zone)

LONG-TERM: 1270.00

 

All/partial contracts should be taken off between the target zones. I'd love to see 1270 retested, but that is an ambitious target no doubt.

[james_gsx 16]

How about this, if we break the low of the spinner tomorrow with strength then I will buy 1 ES put, or maybe even short the ES futures. (i prefer the put). By strength I mean, I don't want a hammer at the low on the 15 min the short it as that would be a dumb move. But if the market shows me the lows broke with strength then I will take the trade and post it on here.

 

Who is in with me?

[james_gsx 16]

If I may... the YM looks like a better short candidate than the ES. Reason being, it hit perfect resistance against the 100EMA, and that will prove to be a key resistance level. Compared to the ES, that could be still technically be in a range bound market. So I will enter the YM trade tonight since I'm okay with the potential $ loss.

 

 

 

[BlowFish 10]

ES from 4-2-08:

 

 

 

I really like this from a risk/reward standpoint.

 

We'll look at 2 possible entry points and see how it turns out:

 

1) AGGRESSIVE: enter now at 70.50, stop at 80.25

 

2) CONFIRMATION: place sell stop at 62.75 (one tick below low of spinner), stop at 80.25

 

Profit targets:

SHORT-TERM: 1321.25 (low of WRB and also a previous support zone)

LONG-TERM: 1270.00

 

All/partial contracts should be taken off between the target zones. I'd love to see 1270 retested, but that is an ambitious target no doubt.

 

That's the beauty of a setup on a narrow bar like this (R:R). Thr trouble with 'long wick' set ups is that you can end up with a distant stop.

[Soultrader 12]

200 point rally in the DAX, all my Christmas's are coming at once!

 

That monthly chart is something worth sticking up on your wall.

 

(yes, I am bullish).

 

I've been "collecting" knock-in & deep OTM options. tasty treats all around.

 

Don't get me wrong, the world is still "broken", but these short-squeezing rallies are delicious. NFP this Friday will be interesting.

 

Im with you on that smwinc... holding on some deep OTM options as well. Financial sectors are due to stabilize anytime as many banks and securities firm are merging.

 

Societe Generale and Calyon, the corporate bank of Credit Agricole have merged their brokerage activities to form a divison called Newedge.

RBS is also merging with ABN AMRO this year. I am sure there are a few more merging related talks floating around.

[brownsfan019 17]

How about this, if we break the low of the spinner tomorrow with strength then I will buy 1 ES put, or maybe even short the ES futures. (i prefer the put). By strength I mean, I don't want a hammer at the low on the 15 min the short it as that would be a dumb move. But if the market shows me the lows broke with strength then I will take the trade and post it on here.

 

Who is in with me?

 

The spinner's low was broken James, valid sell signal here confirmed on both entry methods.

[james_gsx 16]

I figured I should post a quick update. I got out of my position this morning as the ES and YM were unable to break support, and looked very weak in those areas. With 70+ pts in my pocket I didn't want to give a lot of it back, so I got out. I decided wait and see if the support broke - which it didn't - so I promptly got out. 70 pts isn't bad for a little over nighter, and overall I'm happy with my trade. I will also admit that I moved my stop at the open towards break even, mainly to eliminate the potential risk and lock in profits.

 

We will see how things go at the close today, if price ends up hitting my designated target then so be it. I still made money for my bottom line, and at the end of the day that's what I see on my P&L.

 

Unlike some people I will stick my head out and again provide proof of my trade. Accountability is a big issue on forums, and I want to show that if you properly use candlesticks with a positive risk/reward then it can pay off. Also for swing trades, it can be effective to drill down to smaller time frames to plan entries and exits. This wasn't the best trade, but it was a trade that still fit within my plan. Feel free to point out things that are wrong with it, or things that are right.

 

 

 

[brownsfan019 17]

I figured I should post a quick update. I got out of my position this morning as the ES and YM were unable to break support, and looked very weak in those areas. With 70+ pts in my pocket I didn't want to give a lot of it back, so I got out. I decided wait and see if the support broke - which it didn't - so I promptly got out. 70 pts isn't bad for a little over nighter, and overall I'm happy with my trade. I will also admit that I moved my stop at the open towards break even, mainly to eliminate the potential risk and lock in profits.

 

We will see how things go at the close today, if price ends up hitting my designated target then so be it. I still made money for my bottom line, and at the end of the day that's what I see on my P&L.

 

Unlike some people I will stick my head out and again provide proof of my trade. Accountability is a big issue on forums, and I want to show that if you properly use candlesticks with a positive risk/reward then it can pay off. Also for swing trades, it can be effective to drill down to smaller time frames to plan entries and exits. This wasn't the best trade, but it was a trade that still fit within my plan. Feel free to point out things that are wrong with it, or things that are right.

 

I like it James. If YOUR plan called for this, then you did just fine.

 

In terms of a swing trade, I would remain short and only look at the dailys. Keep in mind that I do NOT hold overnight with the current volatility, so my post was purely an informational post. I did NOT take this trade in terms of the swing trade.

[james_gsx 16]

I would say that the potential for volatility to move against me was one of the other reasons I got out at the first sign of weakness on the 15min. Had this been a year ago when the market was going up all the time, things would be different. It looks like we might be setting up for another spinning top.

[BlowFish 10]

Nicely done James. Looks like "they" want those stops above yesterdays high. It will be interesting to see if they can make one last push for it.

[DbPhoenix 42]

I figured I should post a quick update. I got out of my position this morning as the ES and YM were unable to break support, and looked very weak in those areas. With 70+ pts in my pocket I didn't want to give a lot of it back, so I got out. I decided wait and see if the support broke - which it didn't - so I promptly got out. 70 pts isn't bad for a little over nighter, and overall I'm happy with my trade. I will also admit that I moved my stop at the open towards break even, mainly to eliminate the potential risk and lock in profits.

 

We will see how things go at the close today, if price ends up hitting my designated target then so be it. I still made money for my bottom line, and at the end of the day that's what I see on my P&L.

 

Unlike some people I will stick my head out and again provide proof of my trade. Accountability is a big issue on forums, and I want to show that if you properly use candlesticks with a positive risk/reward then it can pay off. Also for swing trades, it can be effective to drill down to smaller time frames to plan entries and exits. This wasn't the best trade, but it was a trade that still fit within my plan. Feel free to point out things that are wrong with it, or things that are right.

 

 

Watch that "smaller timeframe" talk.

 

Question: given your take on the nature of the activity at support, did you go long at 11:00?

[trader273 10]

Watch that "smaller timeframe" talk.

 

Question: given your take on the nature of the activity at support, did you go long at 11:00?

 

What the hell do you think you are doing HERE DB:confused:. This is for people who only, and I repeat, only use candlesticks. I have seen your charts and you use bar charts, how dare you!?!?! This is the "Candlestick Corner". First you are out to destroy the VSA thread, but luckily Eiger is there to keep you in check. Now I see you over here? I know what you are up to :security:. Don't try to derail this thread either. We do not need anyone's view point but our own. We don't want to share ideas with other people unless they have the same ideas we do. What do you think this is, an open forum where people are free to express there opinions and thoughts?? I don't think so.

 

 

DB, I hope you see the sarcasm in this reply. It is in no way serious. We welcome everyone over hear that the candlestick corner. I just find it amazing that some people feel it is there job to try and control a thread or topic for whatever reason.

 

So hopefully you'll enjoy your stay and feel free to post whatver you want. God forbid, we might learn something new.

[DbPhoenix 42]

DB, I hope you see the sarcasm in this reply. It is in no way serious. We welcome everyone over hear that the candlestick corner. I just find it amazing that some people feel it is there job to try and control a thread or topic for whatever reason.

 

So hopefully you'll enjoy your stay and feel free to post whatver you want. God forbid, we might learn something new.

 

Yes, I did, and it's very funny. As for controlling threads, this most often arises out of a lack of confidence in whatever the individual is doing. Not referring to any thread or forum or website in particular, of course.

 

But I hope James takes the time to respond. Although if he's not a daytrader, I can understand why he might not take the long.

 

Funny thing is, I couldn't care less whether people use candles or bars or divining rods. It's all about the same thing: price action. The difficulties arise when the trader begins to think of these things as indicators (if he ever thought of them as anything else) and forgets what it is that they are indicating. It seems James understands this. At least that's what I got from his post.

 

And why no NQ? You guys wouldn't be prejudiced, would you?

[james_gsx 16]

I am on my cell phone so I will do my best to respond. I didn't take the long - because I needed to ice my shins and ankle from running I was in too much pain and couldn't stick around lo lame excuse I know.

 

Any other "normal" day I still would have not taken the trade simply because I don't like taking day trades on the 15min bar, I prefer the 5. I also know I would have a hard time holding something that long without getting out too early. Thats a lack of confidence on my part. I have plenty of confidence with my TA, especially on the daily time frame, but once I take the trade and I don't see immediate results I get figidity. I definitely need to work on trusting myself while in the trade just as much as I do doing the analysis.

 

I will say this trade today confirmed that I need to trade what I see and just go with it. But technically I still got out eary and thus we will have a huge down day tomorrow and I will feel like a fool

[DbPhoenix 42]

I am on my cell phone so I will do my best to respond. I didn't take the long - because I needed to ice my shins and ankle from running I was in too much pain and couldn't stick around lo lame excuse I know.

 

Any other "normal" day I still would have not taken the trade simply because I don't like taking day trades on the 15min bar, I prefer the 5. I also know I would have a hard time holding something that long without getting out too early. Thats a lack of confidence on my part. I have plenty of confidence with my TA, especially on the daily time frame, but once I take the trade and I don't see immediate results I get figidity. I definitely need to work on trusting myself while in the trade just as much as I do doing the analysis.

 

I will say this trade today confirmed that I need to trade what I see and just go with it. But technically I still got out eary and thus we will have a huge down day tomorrow and I will feel like a fool

 

Thanks for the reply, and I understand. I was an EOD trader for quite a few years until the internet came along. Even then, daytrading wasn't cheap given the cost of the software and datafeeds (those who weren't there wouldn't believe how much it cost; remember when VCRs were nearly $2000?), so I didn't get into it until the late 90s.

 

And, no, I wouldn't daytrade off a 15m bar either.

 

As to the down day, who knows? Support, as you noted, is at 60 and resistance is at 80, with 70 being the midpoint. Since we closed near that midpoint, we just have to wait for the market to show its hand, or at least a couple of cards. Maybe you'll get lucky and it'll open near resistance.

[james_gsx 16]

That's another big issue that affects my day trading and sometimes swing trades - taking a trade in the middle of a range. I bought an ES put the other day in the middle of the range, knowing it was in the middle of the range - against a spinning top on support (midpoint) - dumb move and I paid for it lol

[DbPhoenix 42]

If I understand what you're saying, I've found that to be true as well, that if I enter a trade in the middle with the idea of exiting at support or resistance, the trade is much more difficult to manage than if I enter at one or the other of the extremes and hold to the other, or possibly unload at least some of it at the midpoint. Yesterday is a good example.

[zeon 10]

Given the talk about a potential long trade yesterday, and James' YM chart in post #238 ('inability to break support') I'd like to ask anybody what they think of the following. It's related to the same setup, but on the ES instead.

 

Dbphoenix also posted this in the VSA thread: 'long entry at double bottom off support and no supply at 11:00', but given the nature of the debate there it seems safer to post the question.

 

I actually had support drawn a bit lower, because of the highs on the 24th of March. It seemed like logical place and also there was some pre-market action around that level (1357 on the attached chart).

 

Now, I'm not clear on the 'double bottom' concept. Db, are you refering to this on the 1-minute chart (because I know you tend to use them) identified by the two red lines I've drawn? First being a high volume peak (potential selling climax) and the second one is lower volume but price closes way off the lows and rises on the next bars without much trouble. Is this what you are refering to when you talk about 'no supply'? The fact that the rise takes place without much trouble?

 

Or... does the double bottom refer to the first touch of support around the open and the second time around 1100. However, the second time price doesn't really go all the way to support, and if I were to consider a long there, it feels like taking a gamble. Price might as well go to 1357 and then reverse. I've seen it happen several times.

 

Next thing I did was draw a trendline, after the first one was broken another one. It strikes me that before the second is broken, price has failed to make a higher high ('x' on the chart). So when the line is finally breached, would the trader still have a reason to stay in a long trade? Despite that, 15 minutes later we rally up 10 points and after that it lookes like price has lost any sense of directional movement.

 

All comments or suggestions appreciated...

 

Regarding James' chart, support is drawn at 12540 but looks like slightly breached (price goes to 12528) and then recovers. On the ES it's a different picture, price looks well above support. Do any of you guys ever consider what happens in another market (YM/ES/DJIA/NQ) to pre-empt your plan?

[zeon 10]

A chart of the YM and ES has been posted, I might as well add one from the QQQQ (the ETF of the NQ) now.

 

It seems to me - could be wrong though - that this instrument is moving much smoother in regards to support and resistance (look at the pink line at 45.57). However, there don't seem a lot of traders around on forums (except for dbphoenix) that trade this market. Most tend to focus on the YM or ES.

 

Anyway, there's a huge surge in volume when price approaches support and I can't really say I see demand coming in, because price closes all the way down (this is a 5-minute chart of yesterday's action). The next bar however is very low vol, why isn't this just a pause for a continuation to the downside, but instead the beginning of a complete reversal? Just by looking on a 5-minute chart, I can't seem any justification for taking a long entry at 45.15.