Price Action Clues

[erierambler 10]

I'd like to start this off with some charts for the Transports and Dow Industrials. It will be about 3 weeks from now that I can really focus more here on this thread, right now only on weekends. These charts are not the normal Indexes , but that of my own. Notice when the charts are in sync and when they diverge. Such as the Indu makes a new high in Oct/07 and the Tran does not. Then there is a test and failure.( noticeable in Dec/07 ) Now we are insync again and the Tran are reaching old highs. New highs in the index are confirming. I mainly trade the ES, so this thread will become about that but one needs to look at the trees in the forest.

erie

 

 

[erierambler 10]

here are some levels for Sectors, Futures (YM, NQ, and Es), and the ES itself.

 

 

 

[erierambler 10]

same charts as before only updated. Two charts have broke above potential resistance and others have not. ( creating divergence ). New highs are confirming price but sectors chart not breaking out yet. 10 day Mamis oscillator shows divergence big time so therefore very wary here.

erie

 

[erierambler 10]

futures and sector charts

 

 

[DbPhoenix 42]

It might pay to break down the transports the way we break down the industrials. I wonder, for example, if containers and packaging can act as a warning regarding the strength of the transports per se:

 

[erierambler 10]

It might pay to break down the transports the way we break down the industrials. I wonder, for example, if containers and packaging can act as a warning regarding the strength of the transports per se:

 

You've been doing this a lot longer than me. By the looks of the chart they are already diverged, correct? I have the Industrials not making the new high ( creating divergence ) this time , so wouldn't they be showing the warning?

Note: I have for the Transports on my chart: UPS, UNP, FDX, BNI, NSC, CSX, LUV, EXPD, CHRW, AMR, and JBHT. For the Industrial: XOM, GE MSFT, T, WMT, PG, CVX, JNJ, IBM, BAC. These are equal weighted composites.

Of course you are looking at bigcharts .

erie

[DbPhoenix 42]

As long as the Inds and Trans are going in the same direction, they needn't be making new highs together.

 

As for breaking down the transports, I'm not referring to stocks but to groups within transports, e.g., Industrial Engineering, which makes the trucks and railcars and engines; Containers and Packaging, which is self-explanatory; Delivery Services; etc. And it's useful to look at Industrial Transportation, which is nearer to the original constitution of transports. It's the same thing as the transportation average only without airlines.

 

One can also look at trucking alone or marine transportation alone and so on to determine just where the strength lies: in this case, rails and trucking. Which is why I mentioned containers and packaging. If trucks and rails are strong, why aren't containers and packaging equally strong? And does it matter?

[erierambler 10]

As long as the Inds and Trans are going in the same direction, they needn't be making new highs together.

 

One can also look at trucking alone or marine transportation alone and so on to determine just where the strength lies: in this case, rails and trucking. Which is why I mentioned containers and packaging. If trucks and rails are strong, why aren't containers and packaging equally strong? And does it matter?

 

Those 2 questions I can't answer, LOL. The chart I posted of the transports shows price going almost straight up. That can't continue, unsustainable....price has to consolidate or retrace, unless the buying presssure comes from the industrials.

erie

[DbPhoenix 42]

You should see it without the airlines:

 

[erierambler 10]

You should see it without the airlines:

 

 

Looks like a french curve

[erierambler 10]

Looking here for clues...........like a spider should

Although i'm at a remote computer I like days like this

good trading all

erie

[erierambler 10]

Not much selling pressure on these charts. Will buyers come in here? (as they have in the past).

erie

 

 

[erierambler 10]

Buyers came in , but not as strong in the futures as in the sectors. We are at resistance in the futures.

erie

 

 

[erierambler 10]

Divergence with new highs , and new lows are increasing in the sectors and small caps and IYY. Volume and adv issues diverging as well.

erie

[erierambler 10]

Price has fallen out of it's range and has now come back up to it's midpoint. Needs to follow through for strength. Here is some charts.

 

 

 

 

[erierambler 10]

Could the Transports be leading the way down? Rails are weak.

erie

 

 

 

[DbPhoenix 42]

Could the Transports be leading the way down? Rails are weak.

erie

 

Rails are weak, but the other segments in Transportation are doing better. Wonder why?

[erierambler 10]

Rails are weak, but the other segments in Transportation are doing better. Wonder why?

 

It would only be a guess for me, but the cost of diesel has not come down like the price of oil and gas.

[DbPhoenix 42]

It would only be a guess for me, but the cost of diesel has not come down like the price of oil and gas.

 

We discussed this before, months ago (previous page), but those who are new to the thread and interested in using the trannies to predict moves in the indies may want to break them down into trucking, rails, marine, air, and so on, since the transportation average tends to be skewed by the airlines.

 

Back when the Dow people were saying that strength in the transports was indicating the end of the bear market (this was when the trannies were like 2000pts higher), I followed Containers, which were not doing very well. A month later, everything fell apart. Now they're showing more or less the same strength as the rest of the market which, unfortunately, isn't saying much.

[erierambler 10]

like to revive this thread, with regards to S&P . Chart of price action.

 

 

 

 

erie

[erierambler 10]

On another note May 6th and today ( May20th ) have both been 90% down days. Support may be near All we may need is a little divergence

 

erie

[erierambler 10]

here is the divergence, less lows on SPX, volume divergence and ROC. Let's see what tomorrow brings

[erierambler 10]

need a move above 1090 to confirm

 

 

erie

[Tams 20]

need a move above 1090 to confirm

...

erie

 

if you would just add volume to the chart,

you could confirm a lot sooner.

 

 

don't mean to dis your effort to be a PA purist,

but money don't know and don't care if you are unpure.

[erierambler 10]

Tams, I'm confused, what does volume confirm here in the chart? I'm already in the trade long and when price rises above 1090, I believe it will confirm my long trade.

 

 

thanks, erie