Prediction ONLY

Anybody else have an idea according to the charts??



Edited 1 time(s). Last edit at 04/21/2015 12:26PM by Darcy2.

I try to stay away from being precise and getting caught up in my own predictions but 15555 is a good area. My two second read on the weekly said 15600 to 15700 but I did not measure - just estimating. Somewhere in the area of 15600 to 15700 or slightly lower is certainly reasonable but not necessarily in a straight line.

For clarification if I try to get too precise then I start expecting the market to listen to my expectation and miss when the market decides to change. I make general observations and note areas of support and resistance for personal directional assumptions without getting too caught up in the actual number. It keeps me out of trouble. My comment was in no means intended to be a slam on Darcy for putting out a number. Just explaining why I do what I do but the 15500 to 15700 is a pretty good area to look for support and believe Darcy is right on track. We learned back in 2008 - 2009 anything is possible. There is an outside chance of 14000 if selling pressure intensifies but should see significant bounce and support before then.

My personal opinion is that the market is making future vault and LEAP purchases cheaper :-)



Edited 1 time(s). Last edit at 10/15/2014 01:10PM by NCTrader.

What we have is a perfect storm! October being a month where many crashes occur. The market had already been poised to go down prior to entering October. Fund managers holding losing positions, now holding bigger losing positions are going to be scrambling to get out due to tax purposes. Oh and the Fed.....can't forget those geniuses! QE ends this month. I hope everyone has had some nice profits on the PUT side. Look out below.

FM

I see a big Doji on the VIX. Should I consider that as a reason not to enter any new Puts now and to keep an eye for Call plays?

As much as we went down I checked my basket and 60% of the stocks in it actually closed higher - most are compiled from IBD50 and could be considered smaller to mid cap stocks.

I am not currently logged into my charting platform and will not look again until tonight. I also will not give specific advise. In a general sense this is typically not a good time to be entering put positions given the recent sharp move down. You would be chasing the market. If you are in puts and the charts tell you to stay in great. Just not a good time to enter new positions. A tradable slingshot bounce should be coming in the foreseeable future. If so do not get caught up in the bounce. Should be tradable but do not expect it do go the moon and be looking for reasons to take profits quickly. The position of the monthly and weekly charts are enough to warrant caution. Look for declining resistance areas as a target to take profits. If these are hit and the market turns over again, which I suspect it will, then that would be a good time to enter new put positions as we test recent lows.

As for the DOW which we have been talking about keep an eye on the 16000 and mid 15000 area (15500 - 15700). Don't try to be exact. Just be aware of these potential support areas and how the market reacts at each level. If we blow through these levels then my 14000 reference (14000 to maybe 14300) is not a bad call given the current weekly and monthly charts. The key to all this is not getting caught up in the prediction. You simply have an understanding of what could happen, how it could play out and why. You then trade what is actually happening in front of you on the charts be it a bounce or a turn regardless of what you thought would happen. Don't worry if you were wrong as it won't matter if you are trading what the charts tell you to trade. Getting better at your prediction and seeing the move in advance helps you not get caught up in the media headlines like today "Market Freaks Out".

If you want a leading indicator keep an eye on the Weekly, Daily, and 233 ES Futures (S&P emini ). You will typically see a turn on the ES before you do on the general market indices. Go back and look at when the markets turned over and gave you FP/HRFP down (top of this most recent move around 9/20 or 9/22- do not remember the date). Then look at ES Daily and 233. ES gave you a signal that the down move was coming one day prior to the actual markets turning over (ES Daily/233 gave FP/HRFP down one day before market indices). Sure, the major indices indicated significant weakening but ES gave an early signal to confirm. ES is the most liquid instrument and one to always keep an eye on. Someone asked in this forum several months ago if anyone still watches the futures and why. I look at futures on the bigger charts to help me gauge when a current move is coming to an end. Just my two cents :-)

Finally, I could have easily wasted 10 minutes of my time to type all this out and the DOW turns over and goes up 2000 points over the next 60 days. Anything is possible and if that happened I would not be disappointed. I would adjust and follow the charts but the probability of a 2000+ point bounce starting tomorrow is highly unlikely. The point is that I would not consider anything I said above to be wrong. I make the best call possible based on the information at hand, adjust as needed, and look for opportunities when they present themselves. THE MARKET IS ALWAYS RIGHT!

NCT



Edited 1 time(s). Last edit at 10/15/2014 05:43PM by NCTrader.

Ok, long winded last time but started typing and couldn't stop. My apologies. Sonic, you asked about the VIX. Yes, what you see on the Daily is a god indication that VIX will pull back - probably tomorrow but in very near future. I really prefer the formation on the 233. Not perfect textbook example but good reversal signals setting up on both (again, I prefer 233 but that is trader's preference).

Now look at DOW, S&P, and as I mentioned above ES. Same basic pattern but in reverse on all three Daily / 233 charts. The fact that I see the 233 formation on two major indices and the ES tells me all I need. I do not need to look at the VIX. It is potential short term good news for the bulls in the very near future. We had a 450 down move early in the day that bounced back 275 in the afternoon. Definitely good news for the bulls that refuse to give up the ghost. We will see how it plays out over the next couple of days. If it turns and bigger charts support the move then 16500 to 16600 is a reasonable bounce, 16800 to 16900 is very possible, and it could fizzle out around 16300 - 16400. We will not know until it happens. We have not seen confirmation yet. Just a theory based on patterns and chart study. We could very easily wake up and the DOW blow higher forming a hammer / doji on Weekly, bouncing on Monthly middle BB, blowing through 200MA on Daily and see the start of typical FWTZ. I very seriously doubt it but can't rule it out. I think fireman is on target and know that the fund managers cannot move their positions around on a dime. Kind of hard to hit the street with a sell order of 10MM shares. They have to unwind and need time to do so. Typical repositioning by fund managers takes 4 to 6 weeks coupled with dreary economic backdrop. Given Monthly charts attempting to turn over we could be seeing the first of a few legs down.

As an aside you will know if a trader hits the street with an huge block sell order without trying to unwind. It will be the story everywhere at the end of the day. It happened several years back around 2006-2007. The market took a huge dump in a matter of minutes with no real explanations until he end of the day when the story broke.



Edited 1 time(s). Last edit at 10/15/2014 08:30PM by NCTrader.

Currently keeping an eye on the 16600 and 16700 levels to see how we react if we get there. 16600 = roughly 50% retracement of last leg down which also happens to overlay nicely with the 200MA. Slight break of that would put next short term resistance around 16700 to the declining middle BB. With enough good earnings and a seasonality tailwind then major resistance 16800/16900 is possible. At that point a potential HS pattern could develop. Then again the bulls have stepped up all year so it will be interesting to see if they have any life left. I know a few I respect that are calling for a retest of 17200 but I feel that is a bit aggressive. We shall see. Long term projection still hasn't changed given larger charts and economic backdrop but enjoying the bounce.

NCT

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Edited 2 time(s). Last edit at 04/21/2015 12:27PM by Darcy2.

Yeah, I think we are getting ready to find out if this is just a bounce off the weekly BBB or something that has legs. Played out like clock work hitting and pausing around 16600 then 16700 and now in the 16800 area as expected. Nothing to really to show a turn yet but still keeping an eye on ES for clues. What's intriguing is a current test of the weekly middle BB, daily 50MA, & 233 200MA following a 900 point move up and heading into a closely watched FOMC meeting. I would expect more consolidation or a little pullback into the meeting but who knows. If the bulls have a chance then we have to get above these levels with clear follow through soon or the bears might come out of hibernation. Also watching to see if we do move sideways tomorrow and into the meeting. If so then any hiccup during the FOMC release that causes a lower close on Wednesday has the potential to create a lower pivot high. For those that trade price and not indicators that would be confirmation of LPL followed by LPH signaling down. I do not use the 100MA on the weekly but agree with your assessment. It's times like these I enjoy the most as I continue learning.

NCT

Any thoughts on the $COMPQ Weekly turning up and possibly testing previous highs from September?

Considering we are the FWTZ and according to the Decennial pattern it would seem logical that the charts would go back to the upside. Looks like our October low is set. It is by no means easy since several stocks are not doing well - you have to find the quality companies and stick with the winners! Facebook (F is a great example of a winning stock!

I think now that the bulls were finally able to decisively take out the 50s on all major indices then previous highs are within their crosshairs. Daily MACDs have been looking good for some time with 233's expanding and heading into first of the month cash inflows (a.k.a, S6). We still have the FOMC and upcoming midterm elections but the message from the bulls today was "we don't care". It is possible for bearish divergence to set up on the weekly charts but will have to see how that plays out. In the short term FP / SLI on weekly COMP, if it holds, is very bullish. INDU and SPX not quite there yet. At this point new highs would not be a surprise.

As an aside any major move down on the monthly and/or quarterly would typically require a failed retest of the weekly: double top, head/shoulders, higher high w/divergence, etc. Markets rarely make "V" shape reversals. You will see the previous high tested in some way. Obviously I was looking for H/S which seems unlikely at this point. Given that the bigger charts are still showing a large move down is possible I would not be surprised that what we see in the coming weeks could be the formation of some type of retest of the weekly as the bigger charts continue to turn slowly. Time will tell. At some point the fed's printing press is going to come back and bite us IMHO.

NCT

NCTrader

Was thinking the same. Once they hit highs on the weekly the weekly bottom bollinger band will likely be below the weekly 50ma (this means lower boundaries below weekly 50ma). This time on bearish divergence.

-CLT1987

All,

Stocks now at/slightly above all time. From a technical perspective, I just do not see the $INDU Weekly and $COMPQ weekly going up an expanding top bollinger band.

What I think will happen is the $COMPQ 20MA will be crossing up thru the Daily 50MA as it pulls off the Daily expanding Top Bollinger Band. To make a solid down move, I believe you will need Bearish Divergence on the Daily chart as the 20MA and Top Bollinger Band flatten over the next few weeks. $COMPQ Daily is very over bought right now but certainly "uptrending".

Any thoughts? Anyone think the bulls continue to push stocks up going into November?

-CLT1987

I think if you take Survivor GW talks about a pattern that describes this year's chart precisely. According to the pattern, you should see the market extend gains

I do a lot of my market review on the weekends and will be happy to share my thoughts. I am a bit cautious about stepping out there full throttle thinking that FWTZ and seasonality will carry us through the next few months. Still believe at some point bearish divergence will se up and the bears step up. One thing I have learned is that anything is possible. Still managing a few long positions entered around 10/15 and 10/16. Also purchased some vault. Hate to admit it but I have entered a few test/starter positions based purely on the oversold nature of the industry / sector - all oil or heating related. Yes, crude is down, supply and output up, and dollar is down but some of these companies are at their lowest levels in years. The fact that some are so low and oversold on the weekly with histos improving coupled with heading into the colder months compelled me to buy some stock to see what happens. Typically do not do that but looking for a bump up and possibly use for printing press down the road. I am definitely not a fundamental trader nor can I provide a solid technical reason at this point for those couple of positions.

Sonic, I believe CLT1987 indicated they have taken the old 1-5 as well as SW I & II and is aware of the patterns you referenced. The patterns are great when viewed from the perspective that everything else screams a trade and the patterns happen to support what the charts are telling you to do. I try not rely to heavily on the patterns but use them as a general guide. I can go back a few years and find plenty of examples where the market did the exact opposite of the patterns time and again. The patterns were correct on approximate timing but direction was flipped. I am not suggesting that will happen this year but anything is possible. One thing positive for the bulls is the SLI up on some index weekly charts suggesting at least another week or two to go that could also expand the TBBs. We shall see.

For those that do follow patterns a good one to watch will be in 2015. The presidential four year cycle has proven time and again to be much more reliable than some of the longer tern patterns (again, nothing is 100%). The best two years are the years following midterms. If memory serves me correctly both the presidential and GW patterns suggest a good year in 2015. I cannot remember which but one of the two suggests a 91% chance of up with average gains of 25% to 30%. The last time these two pattern converged was 1995. The only difference now is that we are darn close to being 18 trillion dollars in debt :-(

NCT

I think, Market is going to run up on Monday. Probably a great High on tuesday open and then big drop falls. Wednesday bloody. Thursday reversal to buy.

TOSNovie,

Interesting post, there is a major gap on the $COMPQ that could likely be closed soon around 4567. Daily Chart does appear to be uptrending. Should be an interesting week that I think will determine a trend for the month of November. For some reason I just keep wanting to look at the Weekly as if it wants to turn back over going down.

-CLT1987

I am modifying my assessment a bit. The strong two week bounce late October on the weekly charts changed the complexity of their respective monthly charts a bit which I was monitoring. The monthly charts are still indicating OB with a decline coming but the positions of the indicators changed enough over the last two weeks of Oct to suggest that it might not be immediate. Weekly charts showing SLI up in conjunction with seasonality suggests a bullish bias over the next few weeks. Daily also showing a pattern I mentioned in another thread where the TBB curling up and BBB curling down at the same time coupled with strong MACD are all bullish. Finally there is still a little room to go before we hit monthly TBB. I am not sure how the election will fit in or if it even matters. Maybe a bit of volatility or it could be the results are already baked in. I think we do see the weekly BBs open up like the daily as we approach the monthly TBBs. All of this setting up potential bearish div as we have been mentioning. I also think the weekly opening up causing the BBB to curl down pushing the floor lower is a great possibility. This would require a good momentum push on a weekly basis so that the charts look similar to the current daily (bands expanding in opposite directions). Occasionally the push higher with weak momentum barely pushes the lower band open. With weak momentum it may curl a hair lower but almost immediately goes sideways and starts tracking the upper higher meaning the floor will be increasing. We shall see. I have not completely giving up the ghost on a bearish pull back but I have to honor the current weekly setup that supports short term seasonality until the weight of the evidence changes.



Edited 1 time(s). Last edit at 11/03/2014 08:03AM by NCTrader.

P.S. moves almost never happen in a straight line so I do expect some sideways and short chart pull backs along the way :-) A 300 point move down on the INDU would be a small red candle on the weekly n relative terms. The two things I am really watching are how the weekly and daily chart indicators appear at the end of this week in relation to the bands once the election results are completely baked in and behind us. Also watching ES W/D/233 this week for clues. Still bullish at this point for the next few weeks until something changes.



Edited 1 time(s). Last edit at 11/03/2014 08:12AM by NCTrader.

NCTrader,

Great post. Agree with the straight up and down theory, the Weekly will clearly need easing before any drastic turns (histogram etc.). Also, the Daily top Bollinger Band of $compq and $indu is pointed straight up. This will need to flatten before any major downside move happens. Weekly BBB will also have to move a bit further below 50MA.

What is ES?

-CLT1987

Sorry about that. ES = S&P E-mini futures. I forgot the code for Qcharts but @ES is used on other platforms including TS. I like to keep an eye on it as the Daily/233/144 occasionally provide clues regarding the turn and direction. TradeStation automatically configures futures for "All Sessions". I don't mind since S&P E-mini trades 24/7 and is the most liquid and traded instrument. With overnight results factored in the charts look a bit different than SPX or INDU. When the major indexes are starting to turn and just about ready to go you will occasionally see the ES showing something like a double top w/divergence and SLI down on 233 with daily confirming 1/2 to 1 day ahead of major indexes. I use it when I can as a leading indicator. The best example I can provide is back around 9/22 when the markets turned down. ES provided SLI down on Friday afternoon 9/19. Major indexes turned on Monday 9/22.

Another example on 16th when markets turned up but it will require a bit of explaining as I also use price pivots at times for clarity. A quick summary is that you should be able to see some candlestick patterns that are taught in Survivor around the 15th on the major averages. These patterns suggest up is coming but I prefer confirmation. I also liked how ES was looking at that time. When I woke up on the 16th we were retesting the lows of the previous day and it appears that we would hold (maybe 6:00AM). Around 9:30 in the dentist office I heard that we opened and traded down around 250 on INDU. I knew this was testing the previous days lows and had a feeling we would hold based on aforementioned candlestick patterns. I also knew the previous day we were down maybe 450 points and recovered 250 to 275 late in the afternoon (also bullish). So being down 250 at the open was testing the former lows. When I arrived at work shortly before 10:00 the ES was bouncing up on short charts and INDU was only down maybe -84 (already bouncing roughly 170 points from the opening low and previous days low). If you have the S&P e-minis look at the 144 on 10/16. You can clearly see a low the day before, bounce up overnight, then retest of the low early on 16th, it held, and bounced up. That is about as close to a textbook example I can give to my definition of "when it stops going down" that used to be taught in class. It also something that traders who solely rely on price look for to confirm the direction may be coming to an end (double bottom). It also helps if you have divergence to further support the decision. At 10:00 when I noted al of this I knew I would be entering calls around 1:23 on the 16th based on my watch list. I was also expecting a bit of seasonality to kick in as well. What I did not anticipate at that time was a strong bounce that would take out 16600 and 16800 resistance levels and trade up to all time highs. Leaned something though :-)

ES will not provide clues on every turn but it will give a heads up from time to time. I also use the ES for hard right edge practice. Instead of predicting using the three charts mentioned in class I drop everything down by one chart. I am basically predicting the ES around 8PM each night for how I expect it to look tomorrow night at 8PM. Since "All Sessions" is used by TS and ES trades overnight the number of candles that make up one daily candle is roughly the same as how we are taught to predict in class. It also provides immediately feedback. That is why I started paying close attention to ES as I could get quick feedback on my predictions. Eventually I started to see that it can be a leading indicator as GW once mentioned. I still do the predictive work as outlined in class but added the ES daily prediction as well.

NCT



Edited 1 time(s). Last edit at 11/04/2014 11:40PM by NCTrader.

There was SLI down on the $COMPQ yesterday. I saw WYNN being a great trade down off of the open of its last Earnings candle. Below is what I was filled on:

11/04/2014
Buy To Open

2

WYNN Mar15 185 Put

$13.90

($2,795.02)



11/04/2014

Buy To Open

2

NFLX Mar15 380 Put

$33.40

($6,695.02)

I also saw a trade on PCLN but did not take. I don't like the market going down as much as I liked WYNN sitting at the open of last Earnings candle (I have found previous earnings candles to be strong support/resistance). I realize this is "Predictions ONLY" so sorry if I am going outside of the thread topic.

-CLT1987

Beautiful!! I like both but love the entry on WYNN :-)

CLT1987 -



Edited 1 time(s). Last edit at 04/21/2015 12:28PM by Darcy2.

Darcy,

I cannot fully speak for CLT1987 as I do not know him/her but can offer a possible answer. GW started suggesting buying a lot of time sometime between 2006 - 2008. Also strongly encourages a particular minimum. That is all he teaches today. All of this to prevent Rambo time decay and to give you time to stay in the trade if it starts to run. The shortest amount you should ever buy is a few months out for a very short duration trade. That, however, it not what he teaches for most trades on big charts. The more time the better.

As an aside I posted a chart in this forum a few months back that I picked up from Tasty Trade website. Their research seemed to support GW teachings. Time decay starts to increase around 60 days. Most sellers will not go much more than 60 days out when selling an option. The sweet spot for selling an option, during peak decay, is to enter around 35 to 45 days out and hold to roughly 10 days until expiration. The reverse would be true for purchasing. You want more time if there is any chance that you need to give the position time to work and stay in if it starts to run. If anyone is interested I can locate the chart and post again. IMHO those that use momentum and trading short charts, your method that you seem to have mastered, should not need as much. You either right or wrong and only plan to be in today, maybe hold overnight, and out tomorrow should be fine with shorter duration.

Hope that helps.

NCT

Darcy2,

NCT is correct.

Question for anyone who can help. XONE was also a trade on 11/4/14 going down. The stock has gone down roughly 10% since then. I cannot seem to figure out why this would have been such a successful trade as in my notes I stated "do not take" while trading on this day. I understand you can never truly predict the market, but any insight into why others might see this as such a successful trade would be great.

Currently losing slightly on NFLX but making up for it in WYNN.

Thanks,
-CLT1987

NCT..



Edited 2 time(s). Last edit at 04/21/2015 12:28PM by Darcy2.

CLT1987..



Edited 1 time(s). Last edit at 04/21/2015 12:29PM by Darcy2.