23 replies to this topic

[SemiBizz]

Well, we did see a test of "a" low Wednesday on gold, but not a test of "the" low yet. We got under the high volume 1694 hourly on lighter volume for a bullish spring that failed to achieve. Now we are sideways, and volume is drying up here around 1694. In fact this morning it is very quiet. So expect a big move when the "Gorilla" behind the next move comes out of the closet. Normally we suspect when price tests a low then hangs around it on much lighter volume like this someone is trying to make a point. Either no buyers or no sellers. It's not going to take much to move this, but if we do see a sudden vault in volume a VERY LARGE MOVE is in the CARDS. FWIW. Have a good day...

[gismeu]

Thanks Semi, gis

[Russ]

A bullish wedge may be forming here....

[SemiBizz]

GLD failed to break out over 170 on stronger weekly volume. Volume off the top last week, and this week inside on lighter volume, that's a transition candle. 162.07 weekly support is all that's holding it here.

[flyers&divers]

The swing geometries of both daily and weekly (as defined by highs and lows that are pointed out by the swings of my oscillators) are pointing up so every time there is a raid I take in some of the short legs of my bull option spreads and go further out with a layer of new ones. To me which way I am facing is very important. Since we are in a bull trend I need to buy weakness. When GLD clears this congestion we may be looking at a $100 move. This looks like a classic consolidation (pretty quiet), the GLD market rocking back and forth as it is is good for the swing trader and position trader alike. Just my 2c, Regards, F&D

[beta]

The swing geometries of both daily and weekly (as defined by highs and lows that are pointed out by the swings of my oscillators) are pointing up so every time there is a raid I take in some of the short legs of my bull option spreads and go further out with a layer of new ones.

To me which way I am facing is very important. Since we are in a bull trend I need to buy weakness. When GLD clears this congestion we may be looking at a $100 move.

This looks like a classic consolidation (pretty quiet), the GLD market rocking back and forth as it is is good for the swing trader and position trader alike.

Just my 2c,

Regards,

F&D

Hi FD, I am intrigued by your comment above re "swing geometries of both daily and weekly" ... I am wondering how you define this? I have been observing a similar phenomenon where price appears to swing below/above a defined fulcrum or pivot.

I would be fascinated to hear your thoughts on the implications of these geometrical (price) oscillations.

Thanks in advance.

[flyers&divers]

The swing geometries of both daily and weekly (as defined by highs and lows that are pointed out by the swings of my oscillators) are pointing up so every time there is a raid I take in some of the short legs of my bull option spreads and go further out with a layer of new ones.

To me which way I am facing is very important. Since we are in a bull trend I need to buy weakness. When GLD clears this congestion we may be looking at a $100 move.

This looks like a classic consolidation (pretty quiet), the GLD market rocking back and forth as it is is good for the swing trader and position trader alike.

Just my 2c,

Regards,

F&D

Hi Beta,

Long time ago before computerized packages appeared I have marked the highs and lows of the daily or intra day moves to define swings in the need to proceed and build on something definite.
With charting packages available I stopped counting and used various oscillators, not to pick a spot to buy or sell but to define highs and lows. The swings defined by qualified highs and lows (make your own rules) create many repetitious patterns and one can start developing tactics to exploit some of the patterns or series of patterns and compare unrelated issues.

Unlike in Elliot the structures are completely unambiguous and because price movement is fractal they appear in all time scales and frames and trading vehicles.

It always blows me away when I look at a commodity daily chart from the 1930's or a railroad company chart from the 19c how they reveal the same structures as a current securities chart.

Adding moving averages and volatility bands and bringing up these defined swings in different time scales creates a context. A triple bottom UNDER a set of MA's has different value then a triple bottom OVER a set of MA's for example.
As soon as one thinks in terms of structures one can discern repetition, favorable and unfavorable periods to get involved and one notices things that deviate from the imagined norm, one gains confidence that most of them will play out in the future that way (and they invariably do) So I am more interested in the synergies of how current price movement unfolds in the structure then looking for fulcrum points where prices would flip.

Once one figures out which way to face the market one can drill down to details, where volume analysis may come in because it may help in defining the quality of a move from point A to point B or alert of possible failure but the structure is paramount.
In SunTsu's terms I have perspective of the countryside, I decide which battle to initiate or enter and the timing of engagement and resources to commit.
Lt. Volume is reporting me weather the engagement is going better or worse then expected and I adjust if needed accordingly. Lt. Volume is not picking my battles or making my decisions. I do not want to be Lt. Volume because I would be bogged down in the skirmish and I could only handle one or two at a time but I pay attention to him, he is an important person on the team. I want to be Sun Tsu and stay in position to make decisions.

This is not a criticism of any volume method rather how I understand they should fit into my scheme.

There must be good karma to this, strangely, I live in the very neighborhood that was settled by the Wyckoffs in mid 1600's, one of the first Dutch families in NY and America. I would not be surprised, and I am going to research this, if our Wyckoff was an offshoot of the family.

Keeping track of the structures is time consuming in itself and one could not possible analyze volume action on all of them all the time. In GLD etn the current volume action (just at a glance) is normal, since the Oct 4 high volume has been tapering off but the biggest bar is green and so is the biggest bar so far in December. Sentiment is not extreme either way. So for me it is a matter of working into a good position by massaging my option spreads and hang on if and when the market moves decidedly.

KLH mentioned Larry Williams in a commodity related thread on FF. He happens to be a great trader.
I would like to relay a story about Larry that may be analogous to the current situation.

When I was a commodity broker eons ago my partner and I had a client who lived next to Larry in Carmel.
Things were going quite well but unbeknown to us our client relayed everything we were doing to LW.
One day when we had a short Soybean position on I got a call from Larry himself (already famous) basically complimenting us but saying that with that short we are barking up the wrong tree because while the next few days in beans may be down the next big move will be up and he was quite vehement about it.
Bingo, in a few days a big up move in beans started. We probably made a few cents in the beans being short but I never got long, it did not fit how I saw the market at the time.

Many traders concurrently or serially came up with this method. A current very clear example of similar thinking is documented on Cory Rosenblum's Blog (Afraid to trade), I think second newest post, employing 5 minute charts.

We'll see how it will play out, and in options trader's lingo: we'll make adjustments:)
My native language is not English and it takes me forever to write these posts so I do not post too often because it is impossible to answer some of the questions comments with one liners.

Best regards,
F&D

The

Hi FD, I am intrigued by your comment above re "swing geometries of both daily and weekly" ... I am wondering how you define this? I have been observing a similar phenomenon where price appears to swing below/above a defined fulcrum or pivot.

I would be fascinated to hear your thoughts on the implications of these geometrical (price) oscillations.

Thanks in advance.

[beta]

FD, thanks for your insights and anecdotes below. I think for many of us who have been engaged in technical trading for a while, the real quest is to understand whether PATTERN RECOGNITION is a legitimate science of observation, and ultimately, whether markets are random. Based on my own years of trading, I believe that markets are not random, and that discernable patterns DO exist in price behavior. I admire traders like you who have taken much time and thought to craft a workable system of outcomes, and continue to invest in this endeavor. It's quite puzzling how little TA is studied in formal academic venues. Years ago, there used to be many excellent traders on the TT Forum who generously devoted time and insights to educating new traders--which made this forum so valuable. We were fortunate to be the beneficiaries of their vast knowledge of TA. I hope you will continue to contribute your observations about fractals. /beta -------- Hi Beta, Long time ago before computerized packages appeared I have marked the highs and lows of the daily or intra day moves to define swings in the need to proceed and build on something definite. With charting packages available I stopped counting and used various oscillators, not to pick a spot to buy or sell but to define highs and lows. The swings defined by qualified highs and lows (make your own rules) create many repetitious patterns and one can start developing tactics to exploit some of the patterns or series of patterns and compare unrelated issues. Unlike in Elliot the structures are completely unambiguous and because price movement is fractal they appear in all time scales and frames and trading vehicles. It always blows me away when I look at a commodity daily chart from the 1930's or a railroad company chart from the 19c how they reveal the same structures as a current securities chart. Adding moving averages and volatility bands and bringing up these defined swings in different time scales creates a context. A triple bottom UNDER a set of MA's has different value then a triple bottom OVER a set of MA's for example. As soon as one thinks in terms of structures one can discern repetition, favorable and unfavorable periods to get involved and one notices things that deviate from the imagined norm, one gains confidence that most of them will play out in the future that way (and they invariably do) So I am more interested in the synergies of how current price movement unfolds in the structure then looking for fulcrum points where prices would flip. Once one figures out which way to face the market one can drill down to details, where volume analysis may come in because it may help in defining the quality of a move from point A to point B or alert of possible failure but the structure is paramount. In SunTsu's terms I have perspective of the countryside, I decide which battle to initiate or enter and the timing of engagement and resources to commit. Lt. Volume is reporting me weather the engagement is going better or worse then expected and I adjust if needed accordingly. Lt. Volume is not picking my battles or making my decisions. I do not want to be Lt. Volume because I would be bogged down in the skirmish and I could only handle one or two at a time but I pay attention to him, he is an important person on the team. I want to be Sun Tsu and stay in position to make decisions. This is not a criticism of any volume method rather how I understand they should fit into my scheme. There must be good karma to this, strangely, I live in the very neighborhood that was settled by the Wyckoffs in mid 1600's, one of the first Dutch families in NY and America. I would not be surprised, and I am going to research this, if our Wyckoff was an offshoot of the family. Keeping track of the structures is time consuming in itself and one could not possible analyze volume action on all of them all the time. In GLD etn the current volume action (just at a glance) is normal, since the Oct 4 high volume has been tapering off but the biggest bar is green and so is the biggest bar so far in December. Sentiment is not extreme either way. So for me it is a matter of working into a good position by massaging my option spreads and hang on if and when the market moves decidedly. KLH mentioned Larry Williams in a commodity related thread on FF. He happens to be a great trader. I would like to relay a story about Larry that may be analogous to the current situation. When I was a commodity broker eons ago my partner and I had a client who lived next to Larry in Carmel. Things were going quite well but unbeknown to us our client relayed everything we were doing to LW. One day when we had a short Soybean position on I got a call from Larry himself (already famous) basically complimenting us but saying that with that short we are barking up the wrong tree because while the next few days in beans may be down the next big move will be up and he was quite vehement about it. Bingo, in a few days a big up move in beans started. We probably made a few cents in the beans being short but I never got long, it did not fit how I saw the market at the time. Many traders concurrently or serially came up with this method. A current very clear example of similar thinking is documented on Cory Rosenblum's Blog (Afraid to trade), I think second newest post, employing 5 minute charts. We'll see how it will play out, and in options trader's lingo: we'll make adjustments:) My native language is not English and it takes me forever to write these posts so I do not post too often because it is impossible to answer some of the questions comments with one liners. Best regards, F&D

[dharma]

interesting conversation. i started in this biz as a commodities trader. huge leverage. being wrong was costly. my style is still evolving. the biggest mistake a trader makes no matter which pea shooter he is using, is to miss the main trend. i dont know when the main trend reasserts itself , but i want to be in position to ride. i have become more and more of a fundamental trader. these days, its so easy for the really big guys to push the market around and paint pictures in the process. thanks for the input guys. flyers and drivers. were you on dr stools board years back? dharma

[SemiBizz]

GLD is a derivative. We always go to the source wherever possible and that would be the gold contract. Your primary signal for gold commodity.