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How big the bounce?


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#1 diogenes227

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Posted 10 April 2012 - 06:30 PM

Five days down on most major indexes, and on almost every bullish ETF... A NYMO that's down five days in a row and massively oversold, a NYSI that's been going down eight trading weeks... The last two times the market was this oversold, TNA, which I watch closely, could hardly wait to run to the up side -- 16 percent in the next three days in September of 2011; and in November of 2011, TNA went lower 1.3 points for one more day and then rocketed 33 percent from there in three days (talk about reversion to the mean...). For what it's worth, methinks the bears have had their five days at the fair and better now beware... And, yes, a bounce does not a bottom make so it should be noted that in each of the oversold instances on TNA cited above, those bounces were just preludes to bottoms that came a week or so later when the real rallies got cranking (at higher levels those times but that's not always the case so if there's a bear scorch tomorrow there is still hope to cover on some sort of retest a week or so away). Just counting cards here... And you never know -- there a can always be a surprise joker in the deck (the market could crash!). :D Good luck and good trading.

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#2 denleo

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Posted 10 April 2012 - 06:41 PM

The bounce is expected to be 50 SPX points from today's low. 1400 SPX is the target. Denleo

#3 Rogerdodger

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Posted 10 April 2012 - 07:01 PM

It's so obvious. Too obvious? <_<

WWW ;)

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=3&dy=0&i=p85200903176&a=94546561&r=1334104587617.png

Edited by Rogerdodger, 10 April 2012 - 07:36 PM.


#4 denleo

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Posted 10 April 2012 - 07:20 PM

It's so obvious. Too obvious? <_<

WWW ;)


If I think like that, I will never place a trade. I am aware of probabilities and know my worst case scenario.

Denleo

#5 IYB

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Posted 10 April 2012 - 09:01 PM

Back to the 13-day ema (then down) would be my target.... that's about 1390. But we may have a wee bid more work to do below first - tomorrow.

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&st=2010-03-17&en=2010-07-01&i=p29476510164&a=219265881&r=1334109193310.png

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&yr=0&mn=4&dy=0&i=p98648445610&a=225433288&r=8814.png
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#6 thespookyone

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Posted 10 April 2012 - 09:53 PM

The bounce, when it comes, will target the breakdown area.

#7 NAV

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Posted 10 April 2012 - 11:22 PM

Price Follows Breadth-Even Kings Shall Bow


Sure it does. The NYMO crossover you have shown on the chart and per the last discussion we had, price was around SPX 1350. Would you tell us how you managed the 75 point drawdown (from 1350 to 1425) while the king breadth was leading ?

BTW "Pure Price" based system took zero drawdown and gave a sell at 1386 as i posted last week.

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#8 viccarter

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Posted 11 April 2012 - 01:44 AM

Price Follows Breadth-Even Kings Shall Bow


Sure it does. The NYMO crossover you have shown on the chart and per the last discussion we had, price was around SPX 1350. Would you tell us how you managed the 75 point drawdown (from 1350 to 1425) while the king breadth was leading ?

BTW "Pure Price" based system took zero drawdown and gave a sell at 1386 as i posted last week.



I acknowledge that. This is where pure price has its advantages. But over time, you lose some going in and out. Granted its less if you are going in and out on an hourly. You are gonna kill it on a trend move.

Breadth needs to be tracked and trades entered on mult-timeframes as well. Also, in powerful moves, price will INSIST. That is what happened today. It is quite possible to take a well-timed breadth entry and have price move 15-20 handles away from you in volatile markets. You have to acknowledge and manage that risk. It is part of the commission paid for trading breadth where you will catch some leading bottoms and tops, vs, price which will never catch the bottom or top.

#9 viccarter

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Posted 11 April 2012 - 01:52 AM

Let me say that is for very volatile markets, and it is only acceptable when you make trades off a "daily" thesis. I did not go long today. But if I had, then I would have at least a 15-20 handle RUT cash stop for this type of market. What is my expectation for the trade? The 4/9 gap? 810 or 812? Almost 2X my stop, but I can't say that we have a HIGH probability of 812 for sure. I am perfectly happy with a 1X risk/reward when it is very hi probability. But that is not always the case.

#10 andiron

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Posted 11 April 2012 - 03:26 AM

Price Follows Breadth-Even Kings Shall Bow


Sure it does. The NYMO crossover you have shown on the chart and per the last discussion we had, price was around SPX 1350. Would you tell us how you managed the 75 point drawdown (from 1350 to 1425) while the king breadth was leading ?

BTW "Pure Price" based system took zero drawdown and gave a sell at 1386 as i posted last week.


sure enough as market had the worst week in 2012, Don made his presence felt...but shorting based on that model would have been unprofitable, as weeks went by w/ that "sell" internal and there was no gurantee that it wouldn't have flipped to "buy" signal by now...also a KISS position off a post like "hell hath no fury" would have made more shekels....