Trendline watch
Started by
dcengr
, Dec 22 2006 11:28 AM
9 replies to this topic
#1
dcengr
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Posted 22 December 2006 - 11:28 AM
Must bounce here or the line will break.
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#2
Chilidawgz
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A fool and his money... (the second mousie gets the cheese)
Posted 22 December 2006 - 11:31 AM
Pssstt...don't tell the generals but the foot soldiers have gone over the hill for R&R 
Anything can happen...what's happening now?
No one can forecast the future. No one.
All stocks (ETF's) are BAD...unless they go up - William O'Neil
When The Time Comes To Buy or Sell, You Won't Want To - Walter Deemer
#3
dcengr
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Posted 22 December 2006 - 11:34 AM
Pssstt...don't tell the generals but the foot soldiers have gone over the hill for R&R
Complacency still runs high. Day is still young
.I bet if it does break the line, people will say "low volume break, doesn't count".
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#4
Iblayz
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#5
IndexTrader
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Posted 22 December 2006 - 11:42 AM
I think I mentioned it before, but I don't care for how you draw your trendlines. I think a trendline should actually connect the bottoms of price action, not bodies on candles.
Be that as it may...it's clear that drawing a trendline the way you have done it, the price action can break the line and have no bearing at all...it's done it before, and in fact, it's the way you drew the line before.
IT
#6
dcengr
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Posted 22 December 2006 - 11:50 AM
I think I mentioned it before, but I don't care for how you draw your trendlines. I think a trendline should actually connect the bottoms of price action, not bodies on candles.
Be that as it may...it's clear that drawing a trendline the way you have done it, the price action can break the line and have no bearing at all...it's done it before, and in fact, it's the way you drew the line before.
IT
Yup I'll draw another one on the tails after this one breaks. The one I also pay attention to is the trendline on the A-D cumulative.
The one that causes a price reaction, IMO, is the most important one. And since bullishness is quite high, we may only get it after the very last trendline you can possibly draw is broke... on all the indices.
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#7
IndexTrader
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Posted 22 December 2006 - 11:58 AM
I don't know if you're aware of this or not, but Edwards and Magee...the Technical Analysis of Stock Trends...does not believe that breaking a trendline per se is actionable. Instead, what it "may" mean is that the trend is "ending", but it does not necessarily mean that a new down trend is beginning. It could be that it is the precursor for top building.
Of course, when some trendlines break the price action will immediately head lower (assuming it was a rising line), but the problem is that often there is no top for instance, to actually support a sizeable move down. And too, generally when the trendline breaks if you act on it you're "chasing" the price, which can result in some very quick and large losses at times.
Edwards and Magee think price formations are actionable. Or after a line break, perhaps trading after some retracement. Or for that matter, trading from the top of a trading channel, an opportunity we've had in the SPX.
Just throwing it out there.
IT
Edited by IndexTrader, 22 December 2006 - 11:59 AM.
#8
dcengr
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Posted 22 December 2006 - 12:03 PM
I don't know if you're aware of this or not, but Edwards and Magee...the Technical Analysis of Stock Trends...does not believe that breaking a trendline per se is actionable. Instead, what it "may" mean is that the trend is "ending", but it does not necessarily mean that a new down trend is beginning. It could be that it is the precursor for top building.
Of course, when some trendlines break the price action will immediately head lower (assuming it was a rising line), but the problem is that often there is no top for instance, to actually support a sizeable move down. And too, generally when the trendline breaks if you act on it you're "chasing" the price, which can result in some very quick and large losses at times.
Edwards and Magee think price formations are actionable. Or after a line break, perhaps trading after some retracement. Or for that matter, trading from the top of a trading channel, an opportunity we've had in the SPX.
Just throwing it out there.
IT
I'm a "herd theorist", meaning that I believe in mass psycology. If the masses believe "a trendline break" has occured, whatever their definition of it is, if enough people believe it, that will cause a large reaction. That reaction is proof of the belief of the herd that "something has changed".
Whether that is a line break through bodies, tails, or ad-cum, it changes each time. But when it occurs, and the reaction is clearly there, then I think one might say a "turn in trend is very plausible here".
Qui custodiet ipsos custodes?
#9
IndexTrader
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Posted 22 December 2006 - 12:10 PM
I don't know if you're aware of this or not, but Edwards and Magee...the Technical Analysis of Stock Trends...does not believe that breaking a trendline per se is actionable. Instead, what it "may" mean is that the trend is "ending", but it does not necessarily mean that a new down trend is beginning. It could be that it is the precursor for top building.
Of course, when some trendlines break the price action will immediately head lower (assuming it was a rising line), but the problem is that often there is no top for instance, to actually support a sizeable move down. And too, generally when the trendline breaks if you act on it you're "chasing" the price, which can result in some very quick and large losses at times.
Edwards and Magee think price formations are actionable. Or after a line break, perhaps trading after some retracement. Or for that matter, trading from the top of a trading channel, an opportunity we've had in the SPX.
Just throwing it out there.
IT
I'm a "herd theorist", meaning that I believe in mass psycology. If the masses believe "a trendline break" has occured, whatever their definition of it is, if enough people believe it, that will cause a large reaction. That reaction is proof of the belief of the herd that "something has changed".
Whether that is a line break through bodies, tails, or ad-cum, it changes each time. But when it occurs, and the reaction is clearly there, then I think one might say a "turn in trend is very plausible here".
I agree that a reaction may well be proof of a belief on the part of the "crowd" that something changed. But unfortunately, you don't have the proof until it's over. In other words, you can't know the reaction occurred until it actually occurred.
When Edwards and Magee refer to "actionable", they are trying to put technical analysis into a strategy. In other words, acting on a trendline break is not actionable for them because it's not reliable in and of itself. Other things are more reliable, like retracements, formations, etc.
Put it this way, prior to every large decline there is a trendline break. But every trendline break does not lead to a large decline.
IT
#10
dcengr
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Posted 22 December 2006 - 12:18 PM
I don't know if you're aware of this or not, but Edwards and Magee...the Technical Analysis of Stock Trends...does not believe that breaking a trendline per se is actionable. Instead, what it "may" mean is that the trend is "ending", but it does not necessarily mean that a new down trend is beginning. It could be that it is the precursor for top building.
Of course, when some trendlines break the price action will immediately head lower (assuming it was a rising line), but the problem is that often there is no top for instance, to actually support a sizeable move down. And too, generally when the trendline breaks if you act on it you're "chasing" the price, which can result in some very quick and large losses at times.
Edwards and Magee think price formations are actionable. Or after a line break, perhaps trading after some retracement. Or for that matter, trading from the top of a trading channel, an opportunity we've had in the SPX.
Just throwing it out there.
IT
I'm a "herd theorist", meaning that I believe in mass psycology. If the masses believe "a trendline break" has occured, whatever their definition of it is, if enough people believe it, that will cause a large reaction. That reaction is proof of the belief of the herd that "something has changed".
Whether that is a line break through bodies, tails, or ad-cum, it changes each time. But when it occurs, and the reaction is clearly there, then I think one might say a "turn in trend is very plausible here".
I agree that a reaction may well be proof of a belief on the part of the "crowd" that something changed. But unfortunately, you don't have the proof until it's over. In other words, you can't know the reaction occurred until it actually occurred.
When Edwards and Magee refer to "actionable", they are trying to put technical analysis into a strategy. In other words, acting on a trendline break is not actionable for them because it's not reliable in and of itself. Other things are more reliable, like retracements, formations, etc.
Put it this way, prior to every large decline there is a trendline break. But every trendline break does not lead to a large decline.
IT
Oh hell you know me.. I've been doing suicidal dives looking for a top BEFORE a trendline break
I just try to use it as confirming evidence. But no, I'm a suicidal top picker 
Btw, this is looking pretty good so far...
Qui custodiet ipsos custodes?
