32 replies to this topic

[tommyt]

read the post.

I did...just because it's flat it's weak?

Come on...you're better than that.

Fib

80 percent of all the point-gains since March 9th came on those 30 Monday up-days...that is really unreal...and considering we closed on the wave high Friday and its expo, I am very surprised its not stronger today, yes.

[lambro]

lambro, if you can find a repeatable market example to this market, JUST ONE, let me know, I am listening all ears...

This is the most govt supported and broker/dealer manipulated market of all times. There is absolutely nothing you can really compare to when it comes to trading this market. I can only rely on my momentum and cycle tools. I run comps all the time, there is really no historical precedents to the volatility structure of the Nov-Dec trading for example. It resembles a bit to late 2006, but that's about it...

Arbman, that would go to the trade plan risk component. The massive ATR expansion in Oct-Dec, and not just the ATR but the market speed, (time it takes to move the ES one point), was outside acceptable risk parameters for most of the top traders I know, some trading 300 lots. If the amount of slippage, increased stop risk due to extreme swings and outright volatility are dangerous then best to step aside.

I also would look to other crash bounces, until they fell back down they essentially performed as we have seen here. It really goes to what one's pre defined plans are relative to the movement of price.

In 1929 & 1937 we had sharp bounces to the .50 & .618 with end of moves being a spike and a double top, (and I guarantee you early shorts echoed the same sentiments I have seen over the last several months) in both cases shorts had an opportunity to get in once the first jolt was felt. What I am seeing here on this board and with clients I work with (and its nothing new) is that lot of traders are trading with their gut, on news, fundamentals on the expectations of what "should" happen and also seeing some people who have loosely crafted plans but are too easily swayed moving outside of the plan taking undue risk.

Ultimately unless a key component of the plan changes (like ATR over the top, or market speed) then the set-ups and signals need to be followed. Now if someone is chasing a rally for 5, 6 7 months months trying to short it, well that's another issue that is more psychologically based, and the damage from that type of activity takes a concerted effort to fix.

Its a good idea to build at least 2 models for 2 different market conditions. Expansion leads to contraction, contraction leads to expansion, at some point the performance of one model may fall off and it may be time for a different model. My primary futures day trade model is very dynamic with a lot of background info driving a relatively simple screen, its worked nicely in 10-30 point ranges.

[fib_1618]

80 percent of all the point-gains since March 9th came on those 30 Monday up-days...that is really unreal...and considering we closed on the wave high Friday and its expo, I am very surprised its not stronger today, yes.

Well..the day isn't over, and like all strong trends, most of the gains or losses of the day come in the last hour to keep the majority on the proverbial fence. On the flip side, would it be something of note if we did close down today? Would it be the start of "something different", or in this case, the majority having acknowledged such statistics are playing the same side and therefore something like this "stops working"?

When you referred to market being "VERY weak" I believed that there was a much better analytical reference you were seeing in helping your argument besides this statistic. This is what I was trying to pry out of you in your response. I guess my nudge wasn't good enough.

Fib

[arbman]

although the breadth divergence is becoming more and more visible now

Example?

The mkt is VERY weak today.

How so?

Fib

A small NYMO divergence remained since Monday's rally. I have shown here, it didn't change after today so far either. It should lead to a pull back or worse unless we blast and fix it by Thursday, I tend to think NYMO is about to dip below zero from here. It may take a few more days since Thursdays are rather stronger and so far this Monday's high open did not fix it. Tuesdays statistically one of the weaker days, so let's see tomorrow...

[fib_1618]

A small NYMO divergence remained since Monday's rally. I have shown here, it didn't change after today so far either. It should lead to a pull back or worse unless we blast and fix it by Thursday, I tend to think NYMO is about to dip below zero from here.

OK...so the short term trend of NYSE breadth might be showing a loss of momentum. Having covered all of the losses of 2007/2008 in less than 9 months, it probably makes good sense that we start seeing some sort of fatigue in this measurement of the NYSE advance/decline data.

Pointedly, the NYSE A/D line is NOT showing any kind of divergent weakness which is a mighty big difference...I was just looking for clarity.

Fib

[lambro]

I'll offer up one more observation may be of no interest or applicable, but this is it A lot of traders are committing to a position, lets say short, THEN, they are hunting for evidence, any evidence technical or fundamental, this is desperation, then comes moving stops, increasing exposure, adding to a loosing position. They have enough money to keep feeding their account they wash over the losses, or not, they bust. The syntax is reversed, the process is incorrect, this is very bad training, everything you do in the market is training. So it is essential that your actions are carefully planned so that you repeat the processes of a successful trader. Roger Federer does not practice hitting back hands out of the court. Practice the correct way to trade. The syntax should be condition A has occurred, that is the set up condition B has occurred, that is the signal stops and targets predefined are locked and the trade is on. Conditions A & B are repeatable phenomenon. Think about that if you are responding to anything but repeatable phenomenon in your trading. Activities outside of this basic formula will compound errors and create problems. The chances that you are a "chosen one" that can shoot from the hip and make money are very slim, and the chances that you will need to treat trading like a business with discipline and constant attention to your trading state is highly likely.

[arbman]

Pointedly, the NYSE A/D line is NOT showing any kind of divergent weakness which is a mighty big difference...I was just looking for clarity.

Well the I/T trend is already divergent though in NYSI, IF NYSI turns down from here at the resistance zone. This is why a dip below zero for NYMO is very very important here, let me also clarify that... We are at the onset of a major cyclical low in my measures, so I tend to think we will actually sell from here BELOW 1000 by March... So, let me be extra extra clear...

Edit: For the "cyclical" momentum setup described by Hurst FLD configuration says a decline below 1131 by Friday's close will be sufficient to mark a top, this is also what the option expiration is telling me at this juncture. The balance is around or below 1131 for Friday and this would mark the top according to the cyclical momentum setup. I cannot get any more quantitative than this probably.

Edited by arbman, 11 January 2010 - 02:27 PM.

[tommyt]

When you referred to market being "VERY weak" I believed that there was a much better analytical reference you were seeing in helping your argument besides this statistic. This is what I was trying to pry out of you in your response. I guess my nudge wasn't good enough. Fib [/quote] i was only referring to that stat...nothings changed, its an amazing bull run characterised by early weakness, late firming, and low volume. And plenty of us doubting it. The gig is still on.

[TMN]

i want to be short but i can't. not only i cannot see the technical reasons, the market just does not feel yet at all.

[fib_1618]

A lot of traders are committing to a position, lets say short, THEN, they are hunting for evidence, any evidence technical or fundamental, this is desperation, then comes moving stops, increasing exposure, adding to a loosing position.

Very astute statement.

I have several signatures that compliment this observation. In this case, I'll choose this one:

"What we see depends mainly on what we look for"

Right now, the trend of least resistance remains higher. Because of this, we should only be looking for evidence of an impending turn from this same direction. Until the predominance of the evidence is high enough to force you to look for this change, everything else is just a distraction, or as aptly put in the statement, an act of desperation to compliment a predetermined bias.

No finger pointing implied or suggested....just being philosophical.

Fib