AMT Model & Methodology

[Frank D]

Not expecting much upside in today's trading, each lower swing
point for Wednesday and Thursday provided Longs, Today on
Friday isn't the case, my exepctation for today's trading is
to remain flat or further downside.

Not trading longs on open today, let the week trade out.

Frank Dilernia

 

[Frank D]

US markets completed down moves this week into major support zones,
and with SPOT contracts expiring this week along with September
futures running at a premium of 100 points this normally will support the market and push cash market higher.

Full report....

9th June 2007

www.datafeeds.com.au/AMT9june.pdf

Frank Dilernia

 

[Frank D]

Push up early on Monday for US markets before being capped at
their 3-week 50% levels on Tuesday and then being pushed down
once again. The DOW from its R95 highs on both Monday and Tuesday.

This is the same price action as in 2006 and if it continues
prices should go lower than last weeks lows. All global markets
are following the same price action with September futures now
under those levels. A weekly close below the monthly 50% level
and the expectation is a continuation lower into July.

DOW…. Simply use the 50% level as the overall ‘trend’ guide for markets

SPI….

First day back for the trading week we were looking for the
upside completion @6285, with the market opening @ 6247 this
allowed traders to pick up more points in early trading, however
once it moved back below 6285 it has followed the same weaker
price patterns as most other markets.

Any upside today and the resistance level is 6220 for day
traders.

Price patterns often repeat in global markets and this is the
exact same price pattern as the 2006 sell-off confirmed with this
push down from the weekly 50% levels this week.

My expectation is for continued weakness in the weekly
timeframes with short-term counter-trend moves in the
daily timeframes into July's Dynamic lows that align with the
Quarterly 50% levels. (major secondary support)

Frank Dilernia

 

[Frank D]

June contracts will end today on US markets, and with
September running at a premium into expiry this help drag the
cash market upwards into Thursday's expiry.

DOW…


Price has stalled at the 3-day highs, however with US markets
now trading above the weekly and monthly 50% levels and also
trading above the Quarterly highs, traders should get a better
idea on how well the market is supported at the close of
this trading week and the start of next week.

ES-minis.

Gives traders a clearer picture with the completion down into the
3-month 50% levels last week and now trading back above
the intermediate timeframe 50% levels.

As previously mentioned simply use the weekly 50% level as
your guide and the same applies next week.

SPI…..

Followed the US markets higher overnight in sycom, and today’s
open will complete the R87 @ 6260, not giving much chance to
‘day-traders’ to capture an up move like Monday unless they open
it lower again.

Daily system is adding more longs on higher open
(normally offloading) so an extended push higher today back
towards the 3-day highs is an expectation.

Frank Dilernia

PS. These Daily reports will now be emailed to subscribers before
market open. cheers

 

[Frank D]

ES….

Primary timeframe dynamic high (yearly) reached, and a perfect
top with major resistance forming. Bearish divergence in
the preceding month of July with lower top.

All global markets have the same bearish divergence for
July.

SPI….

Secondary timeframe dynamic high (quarterly) has capped the SPI
for a number of months now, providing ideal swing trading.

There is a major shift in timeframe support and resistance at
the end of the next week. All global markets have been
supported above the previous 3 months highs, this support
will disappear and shift forward, at the same time resistance
will disappear.

Bearish Divergence in July…

Same divergence occuring in the preceeding month when markets dropped two days before the end of February this year.


Frank Dilernia

(c) AMT Dynamic trading model

 

[Frank D]

US markets

Highest probability of a 2-day directional move on US markets
on Tuesday. (2-day trending period)

Direction unknown, but trade on the side of Midnight close
on US markets as a Risk level. If markets are going to follow
the divergence of July then Tuesday has the highest probability
of heading lower.

Early US price action in the day sessions should set up the next
2 days, whether it rallies or sells off, simply use 13483 as
your risk level

SPI…..

Has followed a weaker pattern into the close as per this
morning report waiting on direction of US markets….


www.datafeeds.com.au/AMTDaily26-5.pdf

Frank Dilernia

(c) AMT Trading Model:

This is not trading advice

 

[Frank D]

ES-minis….

So far so good on the down move, price is heading down from
the 3 week 3 50% levels 1518.50

A bearish weekly pattern should ‘hopefully’ trend down for
the entire day….

DOW...

Upswing in early trading and heading down from range high,
same expectation head down from the 3-week 50% 13508

The market can do anything, but I'd be surprised to see the
market head higher today when they push it down from the
3-week 50% levels coming in a monthly divergence for July.

Frank Dilernia

Going to bed now hopefully I'll be smiling when I get up and not see
US markets trading above those 50% levels.

 

[Frank D]

----- Original Message -----
From: frankd@fdtradeco
Sent: Wednesday, June 27, 2007 7:02 AM
Subject: AMT daily report

AMT Daily report 27th June….


DOW

The same pattern occurred last week; a doublebar up move
followed by a double bar down move, if this is going to be the
same then the DOW should hit 13359 before any buying support
comes in.

2 contract traders on the DOW should hopefully be exiting
1-contract around R50-55 points as it moves away from OTD
and letting the last contract run into Primary range completion,
or hopefully today into the close of the day.

----- Original Message -----
From: frankd@fdtradeco
Sent: Thursday, June 28, 2007 8:30 AM
Subject: AMT Daily report

AMT daily Report 28th June 2007

DOW….


The support zone on the DOW @13559 provided the platform for
a counter-trend move upside, but it travelled much further than
I expected in US markets, so those who held into end of day
would have been chuffed.

A weaker pattern would have stalled around the first bar
primary highs and consolidated for the day with the next drive
down on Thursday.

The expectation is for a trending weekly pattern on the downside,
so a drive back down can still eventuate but most of the best
sell zones occur around the primary highs, that means a further
push upwards into 13571.

if the market is going to come down then price shouldn’t spend too
much time above that level, and I’d be weary on trading
shorts above that level.

ES….

Weekly resistance level @ 1518.50, if the market is going to
come back down then it should head back down from this level
on Thursday. The AMT levels normally provide robust resistance
and support levels.

The risk level on ES is 1518.50, with any push down price would
need to head back down into 1511 and continue lower, the only
thing that favours a push higher is another Primary range on
ES should push the market towards 1524.25, US traders should
know which direction the markets is heading by the time the
market opens on Thursday.

Frank Dilernia

 

[Edwood]

great calls the last couple of days Frank - one day early on the call for the trending day but excellent stuff all the same gotta be happy with that

 

[Frank D]

Edwood,

In the reports I try and show levels in the market that have
the highest probability of reversals based on the ‘daily
timeframes’ so traders have an idea that there is an
expectation that support and resistance has a follow through.

Depending on how many contracts you trade there are mini point
moves based on 55 points, so if you are trading 2 contracts
you focus on a first exit 55 point then into larger ranges.
If there is a major pattern based on alignment
(AMT model expectation) then hold into the end of the day.
Once you get your initial exit out, then let the day takes
it's course as long as you are trading in the direction of
the Primary Range bar.

But for the 2-lot trader its always-based on first and 2nd
exits, anything other doesn’t matter. If you are a 3-lot trader
then it makes it easier to hold into end of the day. I always
talk in minimum contracts of 2 lots.


Looking at both charts for Thursday I don’t have any shorts at
this stage of the day unless it moves higher, or even if it does
come down on Thursday, a high probability pattern 'short' might
not appear until Friday or next week.

The ES chart is exactly the same, the BUY up from lows, but
traders would have exited on the first 13 point rally , after
that there was no alignment for the rest of the day, and there
are no shorts in the market at this stage.

Regardless of any ‘forecasting’ I do, there are always levels in
the markets that provided the best possible zones to trade
from. It's not about 'prediction', it's about trends and
support-resistance,

If I’m a day late or a day early when I you do the reports
that are 12 hours or a couple of days in advance for US
markets those levels still exist, it's just when and how fast
they get there that matters.

But you’d be surprised how Aussie traders in our day session
or early evening can get set before the US opens.

Regards,
Frank Dilernia

 

[>Apocalypto<]

Frank,

thanks for all the time you spend in this forum sharing your methodology with us. I greatly enjoy your approach and reading your posts.

It's a great thing that traders like your self do this as it adds the depth in the forums.

Cheers
Joseph

 

[Frank D]

DOW...

Yesterday the sell zone was 13572, (R55 high was 13580). The
trader looking to short this point would have exited on
55-points down and remain shorted. From this point the trader
has banked his first exit profit and can go to bed running
stops above the days highs.

A trader who monitors the market all day can use the next
upper level @ 13614 as the next sell zone, but this time it’s
more risky because it’s breaking the 3-day highs, the trader
might want to sit out the next trade or trade less contracts.

Looking at the overall picture on US markets, I would have liked
to have seen a bit more weakness in today’s trading or coming
into the close of the day, there’s 1 more day and then a major
shift in monthly and quarterly giving new levels based on a shift
in time.

Frank Dilernia

 

[Frank D]

ES…

US markets have stalled at their 3-day highs and with drive down
on ES into 1515 will put it back under the 3-week 50% levels.

A failure of the 3-day highs and move back under the 3-week
50% levels isn’t a good sign for the market.

I have no idea what they will do on Friday to close out the
Quarter; normally I wouldn’t expect another drive down in the
same trading week. There is normally only 1 larger trending
day within the weekly time, with next week providing the next
major trending day, but the expectation is a pullback into
the next 3-month 50% level currently 1499.

These 50% levels are major support zones, a break of those
50% levels and I’d expect more weakness.

There are no high probability trades for Friday on US markets

Frank Dilernia

 

[Frank D]

Wild night on US markets.

DOW

#1 Thursday Expectation that prices had to complete the
downside. 2 lot trader holding from Thursday would have exitted at lows.

#2 once Thursday completed around the lows, Friday found support
as buyers came rushing in driving the prices back up. (OTD is open trading dynamics or support/resistance)

#3 back into Primary Highs, hitting upper sell zone of 13614
and down she goes into another double range low.

Overall picture on US markets, whilst trend is above secondary
50% levels (monthly; Quarterly), trend remains strong. The
only weakness is that price remains or is consolidating around
the intermediated timeframe 50% levels (weekly) , which can last for
a number of weeks.

And if this volatility continues then precise swings in the
market should hopefully give traders nice support and
resistance levels to trade from. This trading will suit
swing traders much more than momentum traders for the time
being using OTD levels.

With the Major divergance for this month; I would have thought that
more weakness would be in the markets especially this week. I've have
seen in the past that this price action can remain choppy for a number
of trading weeks before any further up move, whilst price remains above the
monthly 50% levels.

It would suit me fine because that's my trading style; UP trending
weekly patterns are hard to get back into the trend after you
have exitted, with the next best trade coming in the following week.

Index Markets normally have an UP bias, so it's easier to get into
down trending/consolidating markets because markets will rebound
more often. UP trending markets once you get out of the trend the next
best entry will normally occuring the the follwing week after a 2-day
pullback into the 3-day lows.

Frank Dilernia

 

[Frank D]

A Rising weekly trend and volatility drops considerably, not
ideal for Day traders.

If the expectation is that the weekly timeframe continues
higher into Friday then unless it pulls back traders will find
it hard to get back into the trend. (swing traders)

Ideally in a rising weekly trend we would like to see a
2-day pullback before the trend continues.

DOW….

Using statistical ranges of the DOW the most logical zone for
the pullback to begin is from 13682, today’s high (don’t
trade shorts above this level)

Ideally the best zone would rise from (support) 13568
normally starting from the following day. Pullback aligns
with timeframe 50% levels.

‘If’ the market follows this pattern, then 13568 would need to
hold and then for the next up move to begin starting from the
next days trading.

Frank Dilernia

 

[Frank D]

ES…

If traders are looking for a level for the start of any
2-day stall/rotation back down before the weekly trend
continues then 1539.50 is a satistical probability level for this
to happen.

Trading shorts above this level for the remainder of the
week has 'greater' RISK.

Ideally a 2-day stall rotation allows swing traders to get back
into weekly trends

Frank Dilernia

 

[Frank D]

ES….

ES coming into the open of the trading day, expected
resistance zone is 1539.50

There has been a slight push upwards into @ 1540.75, with
a matching lesser range confirming probability 'sell' zone.

parital exit @ 1536.50 then move 2nd lot to stops above highs.

DOW…

Has pushed upwards and trading just above 13682, I would
have preferred to see the DOW below this level with the
expectation that there is going to be a 55 point down move before
US markets actually opened.

Partial exit 55 points down with stops moved above highs.

Hopefully ES will drag it down.

Frank Diernia

This is not trading advice.

As pointed out in another thread, because my posts seem like to be giving
advice this will be my last post on trading set-ups

cheers
Frank

 

[Frank D]

That was a short-term pullback into the 3-day highs within
the weekly timeframe.

Friday can close where it wants to now, ideally 1 more 'stalling'
day would be ideal before the next week begins.

Frank Dilernia

 

[Frank D]

US markets moving in a 2-day stall within the weekly timeframe.

Strong trending weekly trends would normally see Buying support
around 13667 and then a continuation of prices on Wednesday into the
close of the trading week.

The only thing that is a concern is the lower 50% level for next
week, normally that is a forewarning of a weaker days into the end of the
weak, or more a choppy trading week than a trending week.

Frank Dilernia

 

[Frank D]

DOW

Upper reversal level from 13760, start of the rotation within
the weekly timeframe.

First support level 13667 provided a 55 point up swing
before continuing down into the next @ 13616 (AMT risk
level for Wednesday) and rotation back into the 3-day
lows.

Alignment with weekly 50% level and still in a 3-day BUY
cycle.

Only thing that is concerning is the diverging 50% level for
next week which isn’t a bullish sign for the current trading
week.

Frank Dilernia