Trading The Wyckoff Way

[Gringo 10]

Same chart without bars:

 

 

Gringo

[Niko 10]

The market was in a very tight TR the whole session, it oscillated around the 82 level, buyers did not have enough strength to move prices beyond 88 and sellers were unable to get bellow 73.

 

During the session I pointed out in the chat that 77 and 73 looked like levels of interest, but I did not have them plotted in my chart so I did not pay much attention to them, something to work in into the future.

 

My analysis for yesterday´s action:

 

 

 

1. Before the open prices had been rising towards R at 82, after the open 82 was taken out and a small RET gave an opportunity for an entry, although this one is tricky because of the small poke above R, that could easily be a fake break of R.

 

2. After a more significant upswing prices made a V reversal at 86 and started a bumpy descent, the bumpiness was a signal of buyers not giving up on the way down, so one must be alert for a RET opportunity that came up around 9:40.

 

The result of the Ret was a rapid advance above the LSH, but then price stalled at 88, broke the DL (not drawn) and then made a LH and a LL. At first this looked like a normal pullback but then at 9:47 the rapid collapse in prices gave signal that something was wrong with buyers.

 

3. Finally sellers managed to reach S at 82, but were rapidly rejected by buyers. Sellers were not giving up and sold all they could making prices fall fast as well, but then again buyers were just too strong at S and prices bounced making a DB and then a HL, from there prices rose rapidly with hardly any sellers interference until they reached the 88 level (HOD) and marked a DT.

 

4. After the rapid REV from the DT at 88, buyers gave it a last try at 82, but by then sellers had gained a following and got what they wanted, breaking bellow 82. The first minutes bellow 82 were a little bumpy with buyers interference but after the (LOD) was taken out sellers went into frenzy taking prices lower and lower. Finally buyers came in at 73 where a V reversal showed the conviction of their intentions.

 

Around 76-79 prices congested and finally around 10:26 there was a BO from the TR, but it was short lived and stopped on the now R area of 82.

 

5. Prices bounced from R making a LH and then went back to the TR around 76-79, there buyers started acting with growing conviction making HLs.

 

6. Buyers reached R again, but found strong sellers interest, sellers managed to make a LH, which could have prompted a short entry, but then buyers entered strong and broke R which would have triggered the stops on that short entry.

 

By 11:00 prices had broken R and were making HL and HHs.

 

This analysis was posted by mistake in the Tif forum, and i couldn't erase it. Sorry.

[boru 10]

price continues to move up however there is a band of R at 2694-2707 to work through. Support may be found at 2688,82,76,and 70.

[Niko 10]

I had a problem logging in to TF since Friday, something to do with my IP, but the people at support fixed it, and here I am again.

 

Here is the analysis for the day. The trading session (9:30 to 11:00) was characterized by a slow downtrend that started around the open, after buyers were unable to break the Opening High.

 

 

Here is the description of the points of interest during the session:

 

1. Just before the open the market had been flirting with the 95 R area, buyers interest was stronger than selling interest as can be noted by the size of the upwaves. During the open the buyers lost control of the market at 98.5.
   
2. Sellers managed to poke bellow S at 95, but after failing to maintain a LH, buyers entered and made a HL. After this buying waves started to get stronger.
   
3. 98.5 became the HOD and a point of R, and it managed to serve as the containing wall for buyers, who did not manage to even poke this level around 9:40.
   
4. After making a LH, prices started going down and after breaking S at 95 with strength sellers started pushing lower, using 95 as R on the retracement.
   
5. 92 provided temporary S, but buyers were not strong enough (timid up waves to break above R at 95, sellers took advantage of buyers hesitation at the SMI release and pushed prices towards last week´s high where S was awaiting.
   
6. After providing S at 90 buyers did not manage to reach R on the next try.
   
7. Sellers took prices down again to 90 and this time managed to make a LH around it, finally taking prices lower to 86 where S was provided (was not in my levels)
   
8. Price congested around 90 and by 10:15 buyers managed to break out, providing a RET just after the BO.
   
9. Before reaching R at 95 buyers stalled, when R was finally reached price bounced very fast, practically without a warning for expecting bears.
   
10. After 2 bounches at S at 90 buyers were unable to make break LSH and finally sellers managed to break bellow 90 without a problem.
    
11. S was found at 85, but buyers advance was bumpy sending signals of lack of conviction on the upside move.
    
12. After retesting S at 85 price rose rapidly but stalled just ticks away from the LSH, and after that a LH was made.
    
13. Sellers crossed S like a hot knife through butter and prices fell all the way to S at 80.
    
14. After touching 80, buyers started making stronger efforts to keep prices from falling, by 11:00 80 was still supporting the market.
    

Edited December 3, 2012 by Niko

[pjohnm 10]

The TR from Nov 29 gave S/R at 2668/88.

Pre mkt provided a pivot point at 92, and 2700 the round number in sight post open.

 

Price had left the 68/88 TR a few hours before the open, which allowed a trend channel to be drawn to track the strength of the upmove.

 

Chart 2 - Price forms DT post open, 2pts below 2700. Buyers and sellers draw lines in the sand at 98 and 96.

 

Chart 3 - 96 is breached and we have 2nd indication of weakness following the DT. 92 is then tested and holds, buyers form a DB and then a hinge, which buyers break to the upside. Price struggles to hold the new highs and suddenly gaps from 94 to 91, possiby due to the ISM manufacturing news.

 

Chart 4 - Buyers struggle to make headway post the open, with prolonged upwaves followed by sudden deeper downwaves. The best opportunity to join in the weakness comes post the DT at 95 which is followed by a LH.

[Gringo 10]

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

[Niko 10]

After crossing the MP of the Sep-Nov decline, sellers started exerting pressure over buyers and finally managed to hold the 90 R level.

 

During the morning the TL was poked, it is still not broken, but one must be wary as G put it in his post.

 

The low volume yesterday is a signal that buyers withdrawal it could be people taking a break or they are just testing sellers resolve before pushing even higher.

 

 

If the trend holds and buyers keep taking prices higher R could be found at:

 

682-90 area

737

762

788

 

If sellers act with intent and break the TL then S could be found at:

 

643

593

578

514

[Niko 10]

After buyers were unable to hold prices above R 95 sellers used that weakness into their advantage and turned 95 a R level making a LH. From there it was a bear bonanza until S at 67 was hit and prices went into oversold condition.

 

Right now we are on the down trending channel again and SL is still holding.

 

 

If 74 holds as R and prices go down again S would be expected at :

 

69-67

57

49-45

37

 

If the recent reversal is serious and buyers show decisiveness above 74, R would be expected at:

 

80-81

85-90

95

704

[boru 10]

an example of going to a smaller bar interval after a downside breakout for entry. The RET is clearly visible on the 15 sec chart while the first chart (1 min) had no such RET.

[pjohnm 10]

Areas of interest this morning include the trend channel from Nov 15 which is under threat.

A test of pre mkt S at 63 may be important. The MP of the TR at 78 may also come into play. Above that 98 is the PDH.

[crabbydog 10]

Does the rising of price above a downward sloping trend channel take it into an 'overbought' territory? or is the term 'overbought' reserved for the price going above the upward sloping trend channel?

 

I am reading about this in W course but have not finished the whole trend section. I am sure the answer is somewhere.

 

Gringo

 

I had understood that when price goes above the upper trend-line then it was a sign of overbought, regardless if the channel is up or down. be careful though, channels can change after yo first draw them so if the trend channel is based on early moves, the apparent over bought may just be the channel was too narrow or the slope slightly wrong and the channel needs adjusting.

 

Channels are easy to see after the event, not so easy in real time.

cheers

[Niko 10]

I had a bearish bias today, given the context defined in the TIF thread, that did now allow me to see the opportunities that appeared today on the long side, but that is the learning curve I guess.

 

My aftermarket analysis for the day:

 

 

1. The market opened around the 69 R level. Buyers managed to break above R seconds before the open but were stoped by sellers who rapidly retook control of the market. Sellers managed to push prices lower with conviction until 9:33 when they started to falter. By 9:35 buyers had started to show stronger conviction and managed to set a HL by 9:36. The level of the bounce was not one of my s/r levels.
   
2. After confirming 67 as a S area buyers were unable to get above the days High and by 9:46 a LH that followed a strong down wave gave a confirmation of buyers having lost control of the market. Once again prices found S around 63, and buyers took prices higher but this time the road was bumpier.
   
3. R at 69 was reached with difficulty and buyers gave up very rapidly, a LH at 9:58 was a confirmation of sellers conviction, it was followed by a rapid decline that managed to turn 63 into a R level, giving sellers a chance to take prices even lower. At 60 buyers were waiting with a big pile of cash, as they were able to propel prices towards R in a very fast wave.
   
4. Buyers broke above 67 and tested S there, pushed prices higher above 69, but then were unable to beat sellers who were defending the HOD. 10:13 was the turning pint of the market. After a strong down wave that pierced S at 69, sellers rapidly came in and secured this price as R pushing prices towards 67. When 67 gave small S, they took it out again and pushed price lower and lower. Previous minor S at 63 and 60 provided a small pause, but buyers were unable to hold sellers from dumping even more stock.
   
5. Finally buyers started fighting with conviction at 57, where a longer pause was provided. After testing buying interest around 10:33, sellers realized they had the upper hand and pushed prices bellow S, managing to reach 53 where they were rejected strongly towards R at 67.
   
6. A struggle between buyers and sellers was evident around 57 making HHs and LLs (a trend follower´s nightmare)
   
7. By the end of the trading session (11:00) sellers had managed to keep sellers bellow the LSH at 69, and after a LH managed to push prices lower.
   

[pjohnm 10]

The reaction to the downmove from Dec 3rd has stalled at halfway (2678), which is also the MP of the TR that started on Nov 29th.The PD provided S at 50/4 and the hinge at 61.

The reaction from Nov 19 may be coming to an end and a brk below 50 could be important.

NDX 04.12.12.pdf

[Niko 10]

After stooping at the 49 S area yesterday just after 11:00, buyers managed to take prices above the top of the channel and turned 57 into a S area. By midnight prices had surpassed the MP of the downswing at 74 that was also the bottom of the 29th 30th TR, after failing to reach the MP of that TR buyers ran out of steam and sellers took control of the market.

 

 

As of now prices are around the 67-69 S/R level within an mildly up-sloping channel with the following levels of interest:

 

Support:

 

• 57
  
• 50-49
  
• 45
  
• 37
  

 

Resistance:

 

• 74
  
• 80-81
  
• 95-98
  
• 04-06
  

[pjohnm 10]

From TIF thread:

 

"The reaction to the downmove from Dec 3rd has stalled at halfway (2678), which is also the MP of the TR that started on Nov 29th.The PD provided S at 50/4 and the hinge at 61.

The reaction from Nov 19 may be coming to an end and a brk below 50 could be important."

 

(I should add that I saw 54 as more important S as more trades were taken there).

 

Given the above context, it was difficult to look beyond the previous weakness continuing at the open, even though we had a DB at 58 at 9:42, it was immediately followed by a failure to test the previous high, so a break below the opening S level was a confirmation of continued weakness. (There was a retrace around 55 if one wanted to take the break below 58 as a short).

 

50 briefly held, but the drop in price following the contraction in the price range was not a good sign, and represented another short op. This level came into play again when following a db at 42, buyers failed to break back above it. (Note the PA referred to on the chart when price got back here)

 

I had no real levels of S to focus on sub 50, but taking a long at the db at 42 could be justified as current day S. Again, a market breadth indicator would be useful here, and the obstacle levels fairly obvious. Given the lack of S below 50, these are the scenarios where I want to be trying to catch the longer moves.

 

How the trader chooses to ride the wave down to 23 is up to them, but is covered in detail elsewhere.

[Gringo 10]

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

[pjohnm 10]

An interesting development pre open as price has gapped out of the downward channel that has been created since the start of the week. 78 now comes into focus as R, wheras S could be found at 61/56/52 before the level at 47 where more trades have taken place.

[pjohnm 10]

The gap up from 49 to 70 an hour before the open created the potential for a quick reversal should pre open S (64) fail to hold, (given the lack of support that price created on the way up) and the cue for entry was given by the LH following the initial breach of 64.

 

A scenario that perhaps warrants its own strategy.

[tupapa 10]

My plan for tomorrows Bund trading. Traders are currently finding value between A and C, so these are the main levels to look for a reversal or a Breakout.

 

At A, I will go short on a rejection.

 

At B, I will go long if we hold above, target becomes A for the first lot, and I will scale the second lot

 

At C I will go long, the target becomes B. If we break below and can't hold, I will go short, and the target is D and E.

 

At D I will go long on a rejection and see how price reacts at C.

 

There are two other levels that I am not sure if are relevant:

 

Y is the Mpoint of the range, and price was supported here late Friday session, so a long could be legit on a bounce.

 

The VPoc of the current range is 60, so this could also be a relevant level.

 

Does anyone have a view on this? Would you consider Y to be a relevant level?

[pjohnm 10]

My plan for tomorrows Bund trading. Traders are currently finding value between A and C, so these are the main levels to look for a reversal or a Breakout.

 

At A, I will go short on a rejection.

 

At B, I will go long if we hold above, target becomes A for the first lot, and I will scale the second lot

 

At C I will go long, the target becomes B. If we break below and can't hold, I will go short, and the target is D and E.

 

At D I will go long on a rejection and see how price reacts at C.

 

There are two other levels that I am not sure if are relevant:

 

Y is the Mpoint of the range, and price was supported here late Friday session, so a long could be legit on a bounce.

 

The VPoc of the current range is 60, so this could also be a relevant level.

 

Does anyone have a view on this? Would you consider Y to be a relevant level?

 

 

Given that y is a MP, I would note where it is, but then I would be looking for behaviour to confirm whether this is S/R (likewise at B and C). I would also want to know where price is on longer timeframe and make a decision that complements that. (I cant find a chart for this market). Examples would be to take a long on the short term time frame if we are at the bottom of a longer term TR, or in an uptrend, or beaking out of a TR.

 

The main action I look for includes a db, a h&s type pattern, a congestion (pace slowing) followed by a bounce, an sl break (in the case of y being tested from above) followed by a HL. Even then, if the opening is a trend of weakness, then I would probably want more than just one of these behaviours to be apparent.

[tupapa 10]

Thanks John, this is great stuff. I will keep my eye on 65 and see how the day pans out.

[Niko 10]

Well it looks like the admin at TL finally solved the problem with my IP. Lets hope it lasts.

 

This is my recount of friday´s action on the NQ.

 

 

Before the open the market was in a TR within 64 and 71, after the explosive up move that came after the release of the employment data.

 

1. At the open price had found R at 69, and after a sellers final push towards 64 buyers came in the market again and managed to take out 69 just to be stopped at 71 by sellers.

2. A small DT was set and then selling waves started getting stronger.

3. A small congestion at 69 gave signal of buyers trying to hold, but they were unable and prices kept on falling, although with more buyers opposition.

4. As prices reached 61 buyers came in again trying to defend the long side, but the inability to get a HL and then the LH gave signal again of sellers strength.

5. Buyers next try was at 57 where after being tested by the sellers, pushed hard towards R at 61.

6. Sellers did not give up their position and held 61. There was a LH, hardly noticeable and then a LL that gave indications of sellers being on top of tha game again.

7. THis time 57 was easily taken, just a small RET at first, and then after buyers gave it a last try a bigger RET in which 57 was now held as R. From there the downtrend continued until prices found S at 50 and a large upswing came to scare sellers.

8. This swing looked like short selling as buying pressure stalled around 54, from there prices fell and broke 50 with just a small RET.

9 Prices entered the firs serious TR of the day where a TB (Triple Bottom) was set, then buyers started pushing upwards and managed to turn 50 into S again, then at 10:04 after a final RET prices jumped up towards R at 57.

10. 57 held buyers from getting any further. and after a series of LHs sellers finally retook control of the market. This time, the road down the hill was not easy as buyers fought all the way towards S at 50.

11. But then, after buyers were unable to hold a HH prices broke S with no difficulty.

12. S at 47 was near the day´s low and provided temporary S, but then it turned into R and provided the platform for sellers to take prices lower.

13. S at 45 was not felt and prices went all the way to 38 without much interference.

14. On the way up 45 provided R, but then sellers could not take prices lower and buyers took advantage of sellers weakness to push prices higher.

15. This time 45 did not hold, but the nature of the rally was suspicious as it looked to bumpy to be indicative of buyers resolve.

16. The resolve of buyers was tested at 48, where they stalled and sellers started pushing down again, and this time with more conviction that buyers.

17. Sellers turned 45 into R again but once more buyers held at 41.

18. After finding R at 45 again a LH gave signal of Sellers strength and prices went lower. After a struggle between 41 and 45, prices finally reached S at 37 at 11:01

[boru 10]

5 min chart price appears to have found S at 2625 and is making HH's and HL's.my levels to watch are 2625 and 2607 to the downside and 2643,2654 and 2678 if we continue up. The NQ is in a precaious position. A break of 2625 could mean a contination of the downtrend on the daily chart.

Edited December 10, 2012 by boru

[Niko 10]

My analysis for the day:

 

 

 

1. The market opened within the context of a downtrend around the 30 S area, but soon after the open, buyers managed to make a HL and from then started pushing prices higher.

2. After reaching R at 37 buyers failed to keep price on the rise and after a small congestion below 40, sellers started pushing prices down.

3. 37 was broken down and acted as R for the first downswing RET.

4. After sellers failed to reach S at 30, buyers got the ability to mark a HL around 33 and from there started to push prices higher. This time buyers managed to push above previous R at 40 and kept prices rising making HLs

5. Preliminary R came at 44 but was easily overtaken by demand that broke through the 45 and de 47 levels with ease.

6. As sellers tried to take prices down, were unable to reach S at 47 and buyers retook control after this small RET.

7. 50 Provided R, although a HH was tried by the buyers, they could not take prices high enough to stimulate a following.

8. Prices entered a congestion area around 45-47.

9. The congestion was expanded to 44 where buyers were waiting and rapidly changed the pace of the declined and formed HLs.

10. As R was reached at 47 and sellers failed to break with strength below the LSL, buyers pushed again and took prices into the range.

11. The range contracted even more until 10:54 when there was a BO from this springboard, and price rose rapidly.

12. 58 provided momentary R, but buyers were too eager and managed to push prices higher.

13. At the end of the session, prices had reached the 61 R level where buyers were finally stopped by the sellers.

[DbPhoenix 42]