Category Archives: Indicators

Tuesday E-Mini Video Wrap Up

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Enjoy a re-run of today’s E-Mini session exhibiting participation as measured by our Zero indicator. On the left side is the hourly panel and the Zero Lite runs on the right via the 5-min panel. Swing traders and scalpers are encouraged to watch the 5-min panel for early clues – in particular price/signal divergences and lack of participation as expressed by a flat signal. If you like what you see then may want to watch some earlier ones - you will find plenty of examples of what to look out for and how to avoid common traps when trading the E-Mini. Plus you may enjoy the tunes ;-) (more…)

System Quality Number and Stop Logic

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Mugabe posted a few follow up questions regarding the flood of information Scott posted over at the lair last week (if you missed it you should really go and check it out). Given that the tape is gyrating sideways and many are still in the process of digesting what was presented I propose that we facilitate the comment section to discuss follow up question and provide clarifications.

So let’s start with Mugabe’s comment – I actually responded to him in much detail and then fat fingered a page reload. So I’ll just have to do it all over again:

  1. Strategies are tied to market conditions. Nothing works all the time. How true is this? And do I really care, as I’m not looking for superformance? CAGR of 20% with shallow drawdowns is good enough for me. Scott is obviously looking for something much higher.
  2. The whole question of stops, specifically that they are usually too wide once a trade really gets moving. The idea of multiple stops in a race with each other is interesting, too.

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Return Of The Market Mole

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Late last night I returned to Valencia after having enjoyed the tranquility and beauty of Sevilla. If you ever have the chance I strongly recommend a visit as it’s one of the most stunning and welcoming places I have ever had the fortune to experience. And don’t get me started on the food – it will take me weeks of hardcore weight and endurance training to shed the pounds I have accumulated over a mere four days.

But now it’s back to work and frankly speaking I have been very much looking forward to it. No matter what you do with your life, here’s a good test. If you go on vacation and dread returning to your job on Monday morning then stop right now and find something else to do with yourself. Not to sound trite but our days on this soil are numbered – do your best to embrace every single day as if it were your last (like Robert Prechter you will be right exactly once).

When I was meandering the streets of Sevilla I couldn’t help but wonder if many of the low paid staff working at the restaurants enjoyed a better quality of life than the ‘professionals’ climbing their way to the top of the food chain in inhuman urban sprawls like New York, Los Angeles, London, Hong Kong, etc. Most of the folks in sleepy Sevilla seemed rather happy and content with their comparably meager existence. And how could you not be, surrounded by so much beauty, good weather, good food, well dressed and relaxed people. What came to mind was the story of the fisherman and the businessman – in case you haven’t:

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Compressing Range

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SPX is being compressed into an ever-narrowing trading band, and is likely to break out one way or the other soon. Above we have strong (weekly close) resistance at the weekly upper bollinger band, currently at 1884, and we could close this week as high as 1890-5 without a rare and bearish punch above it. I would add though that while a punch above would not necessarily be immediately bearish, but could mean, as it meant earlier this year, that SPX would make a significant high within 50 points or so. With any punch through likely to take SPX over 1900, that would still leave my rising wedge target at 1965 in range (more or less) before that next significant high was made. SPX weekly chart: (more…)

Testing the Water

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Another day of consolidation yesterday with two more tests of key short term support at the SPX 50 hour MA. On the second test there were significant intra-hour pinocchios below it which was new, but the hours closed safely back above. The pattern setup on the SPX 60min leans bearish but could still go either way this morning. The triangle I was looking at yesterday morning broke up and was then retesting hard at the close. For today I would expect that either to break up to a marginal new high, or break down to test the triangle target and possible H&S or double-top neckline at 1824/5. The RSI and trendline setup are leaning towards the bear outcome, and I have mentioned many times before that triangles have a very tendency to make a false break before the real move begins in the opposite direction. SPX 60min chart: (more…)