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AbeSmith

Market Outlook

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Heres my view. The weekly and monthly charts look bullish to at least 13,000. We had a head and shoulders or double top on the YM which made the target in the 11,500 - 11,800. Price hit those levels in the wick we had a few weeks ago, it doesn't matter if price hung around those levels or if price touched them and took off. What matters is price was ACCEPTED at those levels, then moved higher. I expect price to test the old support level (which would now be resistance) before moving lower.

 

attachment.php?attachmentid=5023&stc=1&d=1202071176

 

Volume may be drying up since the sell off, but if you look at where we've been volume is still very heavy. Looking at the INDU monthly we had a small box play, and that target was hit as well. Now we have a hammer with heavy volume which is bullish to me. Unfortunately using candlesticks we cannot come up with a price target like we could with more traditional TA. But I think it's safe to say we will at least test 13,000 before we test the old lows.

 

attachment.php?attachmentid=5022&stc=1&d=1202071176

 

attachment.php?attachmentid=5024&stc=1&d=1202071176

 

Not sure if makes any difference, but gold looks a little bearish here. I think if the market sentiment was to keep falling gold would be a safe haven and would look bullish. As you can see in the chart, we had a bull flag that broke out. Once the target was hit we got a gravestone doji with strong volume, this tells me the sellers came in and price wasn't ready to continue moving higher. Dojis are powerful signals in up trending markets.

 

attachment.php?attachmentid=5025&stc=1&d=1202071176

 

Again, that's my own homework a long with some other things I've been reading. But if you do your own homework and come up with something different then trade that. Good trading!

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Nice analysis James...I agree with the overall sentiment, we just see the path slightly different. :)

 

Starting on the 24th I see some selling at tops and drifts up on low volume so this is why I think we may pullback prior to the 13k level but time will tell. Either way, this was my first bearish period in the market and it's funny to see how people shift to bull mode way too late and even still many are doom and gloom. You can tell who the real contenders in the market are/will be by how they handle the news and refuse to get sucked into the drama. :o

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Exactly MC, I just try to play the charts and I'm more of a short term thinker. I don't understand VSA like some do so some people will see things completely different then I am so I am all eyes and ears.

 

For a while I have been bearish mainly because of the volume slowing on rallies and building on sell offs. But I really do think these rate cuts will help out tremendously over the long haul. I'm not calling for new highs or anything.

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9vjr4h.jpg

 

This looks like a nice spot for a short...JMHO.

We have heavy resistance and the volume has dried up on the rally, we probably need new buyers/fresh volume to break that resistance. Also on the fibs we are in the ambush zone and close enough to the 50% level that I see good risk to reward using that 50% as the stop trigger.

 

I think you're right. That last candle does look like No Demand to me. The real key is the Hammer that you alluded to. We probably need to see more volume to push through that level.

 

Having said that, the game is fixed. The fed, whose mandate is unemployment and INFLATION, now has taken on the job of supplicating to the market.

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So we finally got our push down today but with very little volume. I see a smaller body that would normally raise a red flag since it was at resistance, but I'm a little torn with the light volume. What do you VSA guys say?

 

I would have used a YM chart but the candle came up weird on eSignal so I used the ES instead.

 

attachment.php?attachmentid=5053&stc=1&d=1202161264

5aa70e39effe4_esdailyfeb4.thumb.jpg.e45fe555a8e8b4ed06f30aa9f02cbcca.jpg

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I decided to go ahead and do some more analysis tonight. Basically I went back several years and looked at old trend lines and thing's like that. I like to look at charts like this when I'm unsure of what to expect. I know I shouldn't expect anything, but I feel like I get a more clear picture of the market.

 

One interesting thing I noticed on the ES was we touched old highs. So on a longer term timeframe it almost looks like a test of old resistance and normal rejection. If the old support trend line holds, then that would eventually lead us into a right triangle formation. Of course that would probably take another year to happen, but it's something to be aware or.

 

First I want to look at the daily that we all see everyday. As you can see we have simple rejection at resistance but with very light volume. The 21 EMA also holds as support and the MACD crossover. So far, bullish.

 

attachment.php?attachmentid=5056&stc=1&d=1202199254

 

Now using the same chart, but dated back to mid 2003 we can see we had a very strong bull market. The trendline held very well for several years. In early January that trendline broke and basically all hell broke loose for a few days. The market rallied back to the new resistance line and thus far has been rejected. I have always said that bear markets are known for steep sell offs followed by fierce rallies. Now, slightly bearish.

 

attachment.php?attachmentid=5057&stc=1&d=1202199632

 

attachment.php?attachmentid=5058&stc=1&d=1202199632

 

Now onto the weekly, I think we could call the 5% decline in January a day for price to find a low and establish a long term weekly trend line. The "shorter" term trend line was broken and is now being tested and rejected. 1,300 was tested and proved to be support, as you can see that price poing has served as support and resitance many times in the past. It almost looks like we could be setting up for a long term right triangle formation on the ES.

 

attachment.php?attachmentid=5059&stc=1&d=1202199871

 

Now onto the YM. We have the 8ema crossing over the 21 ema which is bullish. The biggest test is 12,800 as that is old support and should now be new resistance.

 

attachment.php?attachmentid=5060&stc=1&d=1202200433

 

The longer term chart says something different. The trendline was broke back in October and acted as new resistance in December. We can then take old highs and lows to make a new trend channel. Notice how volume increases dramatically as the lower trend line is tested. Also notice how we are against the trend resistance line, which also happens to be 12,800. Coincidence?

 

attachment.php?attachmentid=5061&stc=1&d=1202200433

 

Now looking at a long term weekly chart for the YM everything looks fine and dandy. So I wouldn't be surprised to see price come back and test 11,500 and possibly even 11,000 for the long term support line.

 

attachment.php?attachmentid=5062&stc=1&d=1202200433

 

Simply put this could all be price adjustment from such a long bull run. As we go further into the future more money will be made and as time tells us that moeny will find it's way into the stock market. Over the last four years we have seen a huge bull run and a lot of new millionares to follow closely behind. Eventually as we all know price gets too high and demand gets shallow thus price has to find new value. I believe that's what we are experiencing and I think it will continue for some time. I don't fall for the coming crash or any of that BS.

 

I think I might mention that I do own DIA puts, I bought them at the open today. Short term I'm definitely cautious and leaning bearish. But for the long haul (10 years) I'm very bullish and I think now is a good time to pick up assets that have been beaten to extremes.

 

Remember to stay flexible and don't get emotional. Don't make the same mistake I did and want the market to go a particular direction so you miss out on opportunities sitting infront of you. Hope it helps, and good trading.

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Nice work James. I had someone tell me old charts are useless even from only a few years back even. I just LOL'ed in their face.

 

Unless you had a bear market that wiped the slate clean and caused near all market participants to sell and reset I would look at all trend and support lines as valid. I even go back further like you do, that long term support turned resistance test is a great chart. :)

 

So this AM we finally got our drop, ahead of the 13k most were predicting and despite Cramer saying "go all in" or whatever that douche said. On this drop I'm looking for a lower volume test of support OR maybe the lows though I don't think they want to let it get that far again. Then I think my prediction from mid January will start to take place and we build up to probably test 14k and beyond. I'm no pro or psychic so I won't take trades with a bias, it's just for fun.

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Thanks guys. I also don't see much strength in this market. I don't mean to sound like I know it all. After all, I have only been trading for some months. But for what it's worth, that is still my view. But for now I'm staying away from trading. Or rather, taking a more conservative approach. Need some time to sit on the sidelines and do what a trader from Market Wizards said: just sit around until there is money just sitting there waiting to pick up.

 

So that is my plan right now. Don't see much strenth in the market, but I'm not confident enough to make any moves right now or short at the next resistence, on a swing trade. I may do some day trades if I see a good opportunity.

 

TOLD YOU IT WAS GUARANTEED !

24 HOURS BEFORE IT HAPPENED ! ( Spoon feed you and no action )

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TOLD YOU IT WAS GUARANTEED !

24 HOURS BEFORE IT HAPPENED ! ( Spoon feed you and no action )

 

I respect your trading skills...but to GUARANTEE anything in the market is too balsy for me. ;)

 

I was VERY confident we would drop off...in fact almost had no doubt about it, but as they say "anything can happen". :)

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I respect your trading skills...but to GUARANTEE anything in the market is too balsy for me. ;)

 

I was VERY confident we would drop off...in fact almost had no doubt about it, but as they say "anything can happen". :)

 

It was a figure of speech. But it was a very low risk trade for everyone on this forums.

 

What do I get in return? Lots of envy and negative feedback.

 

As was expected.( its human nature )

 

That's the last GUARANTEED trade from me on this Forum.Good luck to all,

 

YOU WILL NEED IT.

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It was a figure of speech. But it was a very low risk trade for everyone on this forums.

 

What do I get in return? Lots of envy and negative feedback.

 

As was expected.( its human nature )

 

That's the last GUARANTEED trade from me on this Forum.Good luck to all,

 

YOU WILL NEED IT.

 

LOL...I'm hoping this was sarcasm.

I didn't intend to offend you, I just have a hard time with any "guarantee" in the market. There was no emoticon in your post to show any hint of that being a figure of speech or what not. I guess now we should be mind readers as well? J/K :o

 

There is no envy on my part...look at my charts, I've been calling it short as well. I don't need luck, just need to develop my emotions to trade in the "zone". Thanks for the wish of luck though. Good luck to you as well. :cool:

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Not sure anybody "envies" your great call Ronin. We are all waiting for an ounce of proof that your fantastic calls are real. Until then you are just a hindsight paper trader who is a legend in his own mind.

 

 

 

It was a figure of speech. But it was a very low risk trade for everyone on this forums.

 

What do I get in return? Lots of envy and negative feedback.

 

As was expected.( its human nature )

 

That's the last GUARANTEED trade from me on this Forum.Good luck to all,

 

YOU WILL NEED IT.

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It was a figure of speech. But it was a very low risk trade for everyone on this forums.

 

What do I get in return? Lots of envy and negative feedback.

 

As was expected.( its human nature )

 

That's the last GUARANTEED trade from me on this Forum.Good luck to all,

 

YOU WILL NEED IT.

 

It'd be nice if you could at least post something educational other than "hey look at my awesome trading that I will disclose no information of other than PnL results"... Zzzzz...

 

I sure as **** don't envy you, pal.

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Not sure anybody "envies" your great call Ronin. We are all waiting for an ounce of proof that your fantastic calls are real. Until then you are just a hindsight paper trader who is a legend in his own mind.

 

This could easily be proven as legit.

Let's see some proof of your live trade on the GUARANTEE and settle this.

That would settle the issue real quick and maybe produce true envy. ;)

 

I normally don't say anything but the sheer amount of arrogance made it hard for me to bite my tongue. I posted as diplomatic as I could. :\

 

Edit---

As a mod I should probably step in...but you created the drama so I'll pop the popcorn for a bit and then go into cleanup mode. LOL

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TOLD YOU IT WAS GUARANTEED !

24 HOURS BEFORE IT HAPPENED ! ( Spoon feed you and no action )

 

You were right. I see that price went up to the 11/26/07 resistance and bounced off. On the DOG trade I was considering moving my stop a bit to cover that resistence point. I remember it clearly. It was right before I was going to take my dog for a walk. Then twice my dog came over and gave me this look, like he was saying "don't move that stop." Since I was trading the DOG I figured the dog would know. But I think maybe he was just in a hurry to go for a walk. And I have bad memories from losing more than I had planed to lose due to moving my stop. I think this time I wanted to stand my ground.

 

But anyways, we formed a flag pattern on the daily. If it breaks the trendline then it will look more bearish. That is the way I'm seeing it. Or you might say we broke the support at 12600 on the YM. So perhaps wait for price to reach it and short it from there. If I were to do that though I think I would use a tight stop. Me personally I'm not seeing this clearly. I was surprised to see that we had rallied so much last week. Right now I'm feeling more comfortable with day trades than swing trades.

1.thumb.jpg.743d73be9cd97f1da102adb7cf038cca.jpg

Edited by AbeSmith

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Guys, let's leave the Ronin bashing to his own journal thread. If you don't believe him, just ignore him ;)

 

So far my puts are up over 100%, thinking about taking a little off the top here.

 

Sure they are...prove it. J/K :o

 

Nice trade James. :cool:

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I figured you guys didn't need to know how much money I had in the trade, but here ya go ;)

 

attachment.php?attachmentid=5075&stc=1&d=1202270572

 

LOL proof is always welcomed but not needed...I know who I believe and who I don't.

 

You know I was joking but thanks for the screen shot, I envy that and someday soon I hope to have a few of those captures myself. :)

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I figured you guys didn't need to know how much money I had in the trade, but here ya go ;)

 

LOL proof is always welcomed but not needed...I know who I believe and who I don't.

 

You know I was joking but thanks for the screen shot, I envy that and someday soon I hope to have a few of those captures myself. :)

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Oh, I knew you were joking. I just threw it up to show that if you follow your plan you can come away with good trades. It's not too difficult with options when you get volatility like this. I prefer swing trading options for two reaons:

 

1 - I know much I can lose, therefore I feel like I have a better control for risk management.

2 - There are several strategies that you can utilize to make the most out of a trade.

 

I am happy with the gain, but at the end of the day it's just a winning trade. I am more proud of the fact that I was able to stay flexible and take advantage of what I saw on the charts instead of having a specific bias and missing an opportunity.

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