AMT Model & Methodology

[Bobby]

I'll try to get a response from Frank .

Previous question ( Just curious of how you handle chop whilst trying to take those chunks out of the ATR ? )

New question ~ same theme
At what point after your entry do you jump when it goes wrong or do you just go for your predetermined target ?

I traded todays up trend , got a nice bite out of it :brille:

Your statement today was - ( And I’m not interested I trading longs today, but I know if price moves above 3680
during the trading day shorts are open to risk. )

Would Like to be a fan Frank

 

[Frank D]

Just curious of how you handle chop whilst trying to take those chunks out of the ATR ?

If I’m trading support or resistance I’m expecting price to move away (chunk
of the ATR) so there is no ‘chop’.

The only ‘chop’ occurs when you are trading price that’s not near support
or resistance. I don't look at minor indicators

The ATR of the SPI might be over 80points, but more often than not
the price movements of the SPI move in 44-point waves (the chunk). So that’s my focus

If the SPI has moved 44 points in 1 direction the market can often
reverse in the opposite direction if it aligns with support or resistance,
as was the case on Thursday.

If support/resistance breaks then you are stopped out.

Thursday's resistance 3680 & Support 3638

I Personally run 7 point stops around those levels.

At what point after your entry do you jump when it goes wrong or do you just go for your predetermined target ?

I normally trade partial exit strategies where I take the first contract out
at 10-12 points and move stops to breakeven from entry....

And let the market run depending on my view: - exit is
often around 40 points or less, and on occasions the last contract is left to 87 points. (2x44 points)

Your statement today was - ( And I’m not interested I trading longs today, but I know if price moves above 3680
during the trading day shorts are open to risk. )

I wasn’t bullish today based on the open:- higher open and trading
below resistance @ 3680.

I was only bullish once price completed the move down into 3638, as
a potential short-term UP move:- 44 points.

But doesn’t mean that today wouldn’t go up, if price opened or was
trading above 3680, I just wouldn't have traded longs.

The same can be said around 3638 on the lows….

Trading shorts around 3638 was open to risk, it doesn’t mean the market won’t go lower.

But the trader has three options:-

1) cover shorts and sit out (what I did)

2) Partial exit shorts and run breakeven stops from entry, if expecting the market to go lower.

3) or take longs as price is rising up from support (3638) and a 44-point
rotation upwards (what others did)

Because on Thursday that's where those levels were.

The Market is dynamic, so what's support or resistance today won't
be support or resistance tomorrow.

And that's all it is, being on the right side of support or resistance,
trading as close to support and resistance as possible, and taking chunks
out of the ATR.

 

[Bobby]

Hello Frank ,

Liked the way you answered my questions , straight to the point clarity .
So its a thumbs up from me , thank you .

Regards Bobby.

 

[Frank D]

SPI Weekly and 5-day pattern

SPI continues higher this week confirmed with today's open and the
break
in the 5-day pattern.

Nearing the Weekly highs @ 3787, but leaning to a move towards
Tuesday's highs.

No short-trading today even around the highs

 

[Frank D]

SPI Weekly and 5-day pattern

SPI continuing higher this week following the 5-day pattern, along with
the view the market is moving towards the April’s highs @ 3845.

Yesterday started with the break and hook pattern above 3739
upwards.

Today followed early support @ 3780 pushing the market higher into the
5-day highs @ 3810.

There is still a Gap on the downside to be filled @ 3692, but looking at the
US markets I’m leaning towards another Up day on Thursday….

Simply because US markets are currently trading above their 5-day
50% level, and is following a 2-day reversal pattern down
(Monday-Tuesday) and a 3rd day UP move (Wednesday).

Normally Thursday continues higher towards the 5-day highs, without too much weakness.

If that’s the case then the SPI should hit April highs @ 3845 by tomorrow.

 

[Bobby]

Well frank if it hits 3845 tomorrow I'll be buying your book

 

[Frank D]

S&P Weekly and 5-day pattern

higher Thursday move....

SPI reaches its April highs 3845 in the Weekly timeframe

Bobby,

I accept direct deposit if you wish

 

[Frank D]

SPI Weekly and 5-day pattern (24 hours)

April highs reached with precise tops on Friday @ 3852 in sycom.

That completes my 2-month wave pattern from March lows.

This could be the high or it might not, as any reversals down need to
be verified within the 5-day pattern....

But of course I'm leaning towards reversal patterns towards the Monthly
50% levels in MAY.

I won't have another long-term view on the SPI until the end of this
month.

 

[Frank D]

SPI Weekly and 5-day pattern

Selling coming into the market after testing the highs in the day session.

As per Morning report:- random support @ 3792-96 on Friday.

Not interested in trading longs off support.

I'm interested on breaks of the channels lows next week and the
5-day 50% level on any further weakness.

 

[Bobby]

Well done Frank !
Traded some of your action today Thanks ..

Can you direct me to information about your books please .

 

[Cartman]

Well done Frank !
Traded some of your action today Thanks ..

Can you direct me to information about your books please .

Agree --- good calling Frank ---- and you do it on a regular basis !!

Enjoy the book Bob ---- even if you dont use Frank's ideas specifically, i think you will find his concepts refreshingly commonsensical and useful -----

and no im not on the payroll !! ----- but im open to bribery

(and my fees are very reasonable ---------- now whats 50% of nothing ----

 

[Frank D]

S&P Weekly and 5-day pattern

The SPI has reached my upper levels for April and my view is that
price should start to unwind and drift back towards the Monthly 50%
levels.

In the US it’s a different story, as prices are still short of those April highs,
so there is a trend bias to continue higher (at this stage)

Therefore in the US it’s still about rising trends and patterns within the
5-day range: - rotation and extension (until the 5-day lows break)

 

[Frank D]

SPI Weekly and 5-day pattern

This is a perfect example of optimizing a trading model/methodology based
on trends within a multi-timeframe model:- support & Resistance.

I’ve been bullish on the Market until Friday’s highs.

Now my view is that price will try and rotate back down into the Monthly
50% levels.

As pointed out the first sign is a cross-over of the 5-day 50% level.

This occurred with today’s shift @ 3783.

Price is selling down, as part of a Thrust pattern:- moving away from the 50% level.

When bullish I would BUY support (3759).

Because I’m not bullish now, I would use support as a partial ext level and see if it breaks.

If it breaks then my view is it’s moving down towards the Weekly 50% level and could go as far as Monday’s lows (3716)

Just run breakeven stops from entry, as an R44 low could also attract buying, but I’m not trading longs today.

 

[Frank D]

SPI monthly charts 2002-2003

Below is a chart in the last bear market in 2002- 2003

1. We can see the 3rd Quarter breakout and the 2002 Yearly low breakout.

2. Extension down into the 4th Quarter low and reversal upwards.

3. First Quarter 'Top' and collapse into the Yearly lows in 2003 (March lows)

3. The lows in 2003 were the exact Monthly lows based on my Model.

I remember that exact day vividly in 2003, screaming BUY.

~~~~~~~~~~~~~~~~~~~~~~~~

March lows in 2009 and Friday's recent highs @ 3852 is a mirror image of
the same patterns in 2002-2003.

I’m not saying the same thing is going to happen, but at this stage
I'm treating the market the same way, simply because my view is that
the Yearly lows have to be reached in 2009.

If the exact same pattern plays out now as it did then, then low
should be set in June, and I’ll know where that exact low will be.


So far Friday's tops and reversal down, along with US markets
selling down on Monday, traders need to be alert to how things can change quickly and if the same pattern repeats.

But it's not until prices are trading below the Monthly 50% level that
things begin to look grim for those who bought stocks at the recent
highs.

Any trend is dependent on price remaining above the monthly 50% levels,
as we can see back in 2003, and at this stage I can't discount that the
50% levels actually support the market in this quarter and then
continue higher in the following Quarter.

But i'm still leaning on the Yearly lows being reached: approx 2780


And if that Happens i'll know where that next 'Screaming BUY' will be again.

 

[Frank D]

SPI Weekly and 5-day pattern

Friday topped the market @ 3852 and Monday confirmed the reversal
of trend with a move below the 5-day 50% level @ 3783.

That pushed price down yesterday into the Weekly 50% level @ 3732
finding support, and today continued down into the next level @ 3663
finding the
support along with the 5-day low.

I have a view of lower prices in April (back into the Monthly 50% level),
and as per my above post I’m extremely bearish but I need certain things
to confirm any larger down move (break of the Monthly 50% level), and
at this stage there hasn’t been a break of the 5-day lows yet.

The Market has been dynamically moving lower following the 5-day
patterns without a break, therefore price can rotate upwards from
support and move into a 2-day consolidation pattern.

If US markets have an UP day on Tuesday, then my view is to see how
the next two days of trading plays out:- Wednesday and Thursday.

If price remains range bound between 3663 and 3732, then I’m looking
for the next SELL pattern on Friday (larger trend play), or early on Monday
to continue the move down towards the Monthly 50% levels

Of course using confirming patterns within the 5-day range.

 

[beamstas]

Very Nice Frank
Silently following with interest

It seems you are quite bearish of the SPI in the near future

What sort of hit rate do the 50% retracements have? Does it happen often?

Also noticed you change your chart colour most days.. very stylish good to see you are keeping us silent readers on our toes

Brad

 

[Frank D]

What sort of hit rate do the 50% retracements have? Does it happen often?

Brad,

The shorter the timeframe the more it's going to Hit. The larger the timeframe then you'll looking once per Quarter.

I don't have any stats, I'm just a chart reader.

SPI Weekly and 5-day pattern

US markets moved up on Tuesday, therefore my expectation was
a consolidating trading pattern over Wednesday & Thursday between
both Weekly 50% levels with an UP bias

My next short set-up and continuation down is based from Friday:-
higher Daily open using resistance as a ‘short’ set-up.

That will depend on where the Market opens tomorrow.

It could have aligned today using both the Weekly (3732) and 5-day 50% levels and today’s spiral tops… (not a higher Daily open)

But instead of reversing down as was the expectation a number of day's
ago, that wasn’t going to happen once the R44 range closed above
the channel highs @ 3723, resulting in a HOOK an break pattern.

Tomorrow is Friday and I'll see if there is any ideal Short-trade set-ups to take.

 

[Frank D]

SPI Weekly and 5-day pattern

3-day sell cycle on a higher Daily open today:- opens below yesterday’s highs @ 3753.

This is part of my Friday Sell pattern.

But it had to be confirmed with price trading back below 3738.

This was confirmed with a HOOK pattern:- retest 3738 and rejection down.

Now how far is Friday going to sell down?

Note:- 3689 is random support, but I won’t be trading longs off this level. It’s a near exit zone.

If Friday ends up a trending down day it can break support and
continue towards the 5-day lows:- as part of a lower Weekly close
and Friday sell pattern by Monday.

Or

If Friday ends up a consolidating then it will swing up from support and
move into a sideways pattern and hopefully continue down from Monday.

At this stage I’m not factoring in an UP day or higher daily close whilst
below 3738, and I won't be trading longs on any BUYing, as it's not
part of my set-up to trade longs today.

But doesn't mean there won't be any after buying after 3pm and this
set-up fails, simply because I would have expected more Selling in
the market by now.

 

[Frank D]

SPI Weekly and 5-day pattern

3pm buying off support and reversal back upwards...


I haven't factored a down day in US markets on Friday, because of
the Weekly HOOK patterns which normally have higher Friday closes....

Looks like a higher Daily open on Monday.

 

[Frank D]

S&P Monthly and Weekly

US markets continue to push higher and aren’t trading anywhere
near Resistance (April Highs) compared to the Aussie market reversing
down from the April highs @ 3852 looking to move back towards the
MAY 50% level.

I mentioned this a few of weeks ago….

"Rising Weekly ranges but shorter in length and coming
into the last week of this Month.....especially if there is any break of the 5-day lows...."

This week is the last week of the month and there isn’t anything to
suggest that there is going to be a sell off.

In the Chart on the Left we can see the Weekly bars continue to
close higher on Fridays and trading above the Monthly 50% level.

In the chart of the right we can see price remains supported above
keys levels:- Weekly 50% levels.

But what do we notice?

I developed a pattern that alerts traders to a change or loss of
momentum when price isn’t trading near resistance; it’s called ‘DROPS’

This is where the Weekly highs suddenly drop below previous weeks
where they are constantly making higher highs.

I've highlighted Weekly Drop and Monthly Drop patterns previously, which often see a
reversal of the Timeframe 'BAR' closing in the opposite direction of the current trend.

This currently alerts me to a probability pattern that doesn’t favour a higher
Friday close this week, but a lower Friday close: - Random length.

It just basically says…. if you are in a winning ‘short’ position and it’s going
in your favour, then there no reason to cover positions until the end of the Week.

That just could mean a lower Friday close, which could see prices
rise upwards once again from next Week:- lower Weekly open and new
Month starting from MAY 50% level:- Support and continuation upwards.

Or it could result in a lower Monthly close below support:- bearish.