15 replies to this topic

[IYB]

My belief is that successful trading has at it's heart an understanding of context. I keep repeating this and I am sure it annoys some who are day traders and just do not believe it's relevant - or those who read the context differently. But this is Fearless Forecasters, and I've gotta say what I believe to be important. And to me, there is nothing more important to the trader than the context of the market. It affects all trends, right down to the one-minute intra day trend.

An exerpt from a May 22 post.....

This decline has been and continues to be a great trading opportunity on the short side.... certainly the best, in fact, since 2008. BUT...we need to keep our eyes on the instruments which tell us the primary direction, and IT decline (mini-crash) notwithstanding, that primary direction is still UP.

It makes me think of Lt. Col. Kilgore's infamous line "I love the smell of napalm in the morning...." from Apocalypse Now. But do you remember how he ended that soliloquy? "Some day this war's gonna end." That's the part that is easy to forget in the heat of battle - especially the trading battle.

The three most important rules of trading, imho 1.) never lose sight of context, 2.) never lose sight of rule #1, 3.) When in doubt, see rules one and two.

http://stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1996-01-28&i=p73030814314&a=181755078&r=650.png

Jmho, D

And then the weekly....

http://stockcharts.com/c-sc/sc?s=$SPX&p=W&st=2003-01-01&en=(today)&id=p69549111090&a=177361222&listNum=14&r=3667.png


And the daily....

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=0&dy=0&i=p29202309007&a=201469259&r=241.png

And then the hourly....

http://stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=2&dy=0&i=p17354870017&a=189942926&r=616.png

And then....well you get the idea. Good trading, D

[andiron]

but is the trend changing...blowing in the wind...

[IYB]

but is the trend changing...blowing in the wind...

Sure it is. As has been said, "change is the only constant"....... but the process of change takes time...lots of it. And till the process is complete, I want to keep that wind at my back when I trade...

[andiron]

nyad has obtained higher high..while naad's correlation w/ the market is very high (that is no divergence etc).. so russel/reits (iyr) are much stronger than the rest of the market hence bullish NYAD chart.. but will NYAD pull the market up or other way round?? it is well known that NYAD as a signal did not work in 1999 as many who saw declining AD line and sold did not participate in the heady days of 99-2000 rally//

Edited by andiron, 12 June 2010 - 04:02 PM.

[milbank]

Thanks Don. Your "context" posts are never annoying. I don't know if context is the most important thing to me but, it is very important and your posts on it are always appreciated.

[IndexTrader]

Have either the SSs or IBD given a buy signal yet??? I haven't heard. IT

[IYB]

Have either the SSs or IBD given a buy signal yet??? I haven't heard.

IT

Yes. I'll post more on that next week....

[qqqqtrdr]

Have either the SSs or IBD given a buy signal yet??? I haven't heard.

IT

Yes. I'll post more on that next week....

IYB: Thanks.... I appreciate your work... Did notice the 8 hour past the 34 hour on the bull side on the QQQQs. NYAD 12 day has shown strength over the 24 day, so everything is improving. Went long Friday on these facts alone...

Barry

[thespookyone]

Even as a daytrader, D, I HATE to swim against the current-context is always relevant. Must say though, I haven't peeked at a weekly for a while-that's getting a bit touchy. For me, it's a bull run until the 12 EMA on a monthly starts heading South, instead of North-as it is now. Thanks for the charts, love your work!

[Lee48]

Good stuff IYB, from long to short term... Thanks for the update...