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Risk Windows for the Week of 15 January and Doing Davos


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#1 Douglas

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Posted 14 January 2024 - 07:16 AM

According to my risk summation system, the days in the next week or so with the highest risk of seeing a turn in or acceleration of the current trend in the DJIA are Friday January 19th and the following Monday and Tuesday January 22nd and 23rd.  I currently believe the 19th and the 22nd-23rd are two separate risk windows, but time will tell if it's two or just one big window.

 

Last week the Monday the 8th risk window tagged the low for the week and the Friday the 12th risk window tagged the high for the week, the importance of which will have to await trading early this coming week.

yuDfqfx.png

 

In a response to a post by 4caster this past week I noted possible use of divergence in the 8,5,2 Coppock Curve indicator that he had highlighted.  The Coppock Curve is currently showing a series of divergences for the DJIA as can be seen in the red, green , blue and purple trend lines below.  Clearly effective use of divergence here will require confirmation from another indicator to avoid jumping out of the trend far too early, or maybe requiring triple divergences for action in such a strong trend.  I just don't know yet.  I'll need a bit more time tinkering with it to figure out reasonable rules for its use.  It is indicating loss of momentum as this current trend matures just as you would expect.  

 

My red hen scratched numbers against the turns in the Coppock Curve show another possible use, helping to identify Elliott Waves.  If my crude count is correct and the "5" is about finished, then the DJIA should turn down sharply in pretty short order, of course, the 5 could extend just to make things complicated, who knows.  

 

DIaTPxV.png

 

The rich, entitled folks big jet-in to do Davos is this coming week.  It will be interesting to see if the talking heads there parrot J. Powell's optimistic pivot, or if they are more pessimistic, or maybe even more optimistic.  One thing is for certain, they are a lot more richer than last Davos.  As Mel Brooks said, it's good  to be the king.

 

Regards,

Douglas

 

 



#2 4caster

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Posted 14 January 2024 - 09:49 AM

Hi Douglas. I had never seen anybody combine E-wave with the Coppock. I think that what you're

doing with this is very interesting and very scholarly. Kudos to you.



#3 Douglas

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Posted 14 January 2024 - 02:07 PM

4caster, I'm scratching around everywhere for scraps like a junk yard dog sniffing for clues as to what is about to happen.  My current EWave count below is at or very near to a critical juncture where a turn down must occur for the count to be correct.  If the DJIA marches much further north, this primary count gets blown out of the water, and I'll be forced to yet again fish a crumpled-up alternate count page out of the trash can.   6y4vytG.png

 

Surely by the end of this month by the time the next Fed meeting wraps up, it should be patently obvious if my count is still viable or needs a remap.

 

Regards,

Douglas  



#4 4caster

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Posted 14 January 2024 - 03:13 PM

Sorry i can't be of any help with the e-wave stuff. I've never been able to figure out how

that dog hunts. I'm uncertain about this week. Last week the MACD(12,26,9) and the

MFI(14) on the daily SPX chart were flat, not giving a signal one way or the other. On

the other hand, the MACD(12,26,9) and the MFI(14) on the daily INDU chart declined.

I sit on the sidelines when the indicators are out of sync like this.



#5 Douglas

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Posted 15 January 2024 - 04:28 AM

In dTraderB's post just above this one, he quoted Helene Meisler who noted low NASDAQ volume.  This reminded me that the QQQ often tops out on low volume (see green vertical lines below) and bottoms on high volume (see purple vertical lines below).  This does not work well in strong up trends noted by the blue horizontal arrows.  Currently, as Helene noted, volume is low so a top is probably in the making, and the steep trend has stalled so the indicator below is enabled.  

 

To identify the peaks and bottoms below I am showing the 10 moving average of volume's deviation from a 250 day volume moving average using the PVO (percentage volume oscillator).  

 

gfZ3rCC.png

 

Regards,

Douglas