AMT Model & Methodology

[Frank D]

S&P Weekly and 5-day pattern

Expected up move and sell pattern occurred 1 day late using the
2-day pattern rise and 5-day high sell, but the important pattern
was Wednesday’s break of the 5-day 50% level and move down towards the
5-day lows..

As per the pattern, whilst price is below 1062, I would look for a
continuation down towards a lower Friday close, which could end up
around the Weekly 50% levels.

Because there isn’t a break of the 5-day lows, the market can still
remain range bound within the 5-day range over the next two days.

Next Set-up next week...

 

[Ato]

Hi Frank

Sorry, but I havent had the time to read through your thread here in it's entirety just yet. So apologise if the information I ask is already existent.

I am wondering about your book/s. I remember reading that you were writing a second book. Is that out yet? Does it detail your method, like your first, or is it about a different subject?

Also, I'm very interested in purchasing your first book and learning about your method to see what I might make work for me, but I live in Japan. Do you ship to Japan?

Cheers

 

[Frank D]

Hi Ato,

I’m still in the process of writing the book (slowly, very slowly). It could still be months away.


The contents are based on the same Model, Methodology and Principles.

The entire book will be based on set-ups, set-ups and more set-ups, and
pre-empting those set-ups in advance and how long to hold those
set-ups for, whether day trading or longer.

The important part on any set-up is the entry, timing and then trade management, and that’s the focus

There are a number of set-ups that I haven’t discussed in either of the
two books for stock traders, and also for day traders there will be
2-day pattern trading within the 5-day range for futures.

For example, when I go to bed and place a limit entry trade in either the
S&P or DOW (not screen trading) I want to know where to place it, how
far my stops are going to be so that I don’t get ‘taken’ out of the trade,
and whether I take profits during the same day (range bar and ATR trading) or whether to hold over 1-3 days based on Weekly pattern trading.

It’s important for any overseas trader to analyse the price action in the
US, because pre-empting a pattern in the S&P will dictate trades in
Australia or Japan

For example a 5-day high breakout in the S&P will normally continue
higher over the next day or 2. If that’s the case, even if you don’t
trade futures,it allows you to take a position in a stock or stocks’ and hold an expected higher open the next day.

If there is an expectation of a market reversal in the short term like
this week, then there is a good reason to trade manage any positions in
your home country.

The book will be in PDF version, so it won’t have any trouble of going to
Japan.

 

[Frank D]

DOW Futures and the 5-day pattern

This week in US Index futures was about looking for a continuation down into
a lower friday close after the expectation of an early rise on Tuesday
and reversal pattern break on Wednesday.

US markets pretty much followed the 5-day pattern precisely this week and into Friday's lows.

Based on this week's price action I would favour more weekly
rotation starting with a bias of a 2-day UP move from the lower Weekly
open.

 

[Frank D]

DOW Futures Weekly

As per last week's view of reversing down into the Weekly 50% levels,
and then swinging back upwards this week in the 2-day pattern reversal
set-up, we are now coming into the end of the 3rd quarter and starting the
4th quarter.

In the next 3-month cycle my view is that we are moving into higher highs...

However, my preferred pattern would be during October sometime, a
move back down to retest the Weekly lows (shown below), find support
using a lower weekly close set-up, and then continue upwards into the higher
high pattern in the late October/November

When will that happen I won't know as yet, but it's something i'll be
keeping an eye on during any 5-day pattern set-up starting from
October.

In the short-term after Monday's 2-day pattern reversal pattern, the next set-up won't occur until next week.

Back to 5-day pattern 'day-trading' from Wednesday.

 

[Frank D]

S&P Weekly and 5-day pattern


The normal pattern on any 2-day reversal from a lower Weekly open is
to continue towards the Tuesday highs and then reverse back down into the 5-day 50% level on the same day.

This is often based on the line of least resistance within the monthly timeframe.

As we can see the line of least resistance is around 1062, not allowing the
2nd day ‘set-up’ to play out, instead remaining within a 2nd day stall
pattern coming into Wednesday and the last day of the 3rd Quarter.

September resistance shifts higher.

 

[Ato]

Thanks for the detailed reply, Frank. I'll keep an eye out on this thread, watching for your post saying you've finished the book.

Cheers

 

[Frank D]

S&P Weekly

S&P remains range bound between the September highs levels and the Weekly 50% levels to
close out the 3rd Quarter.

There is an expectation during the 4th Quarter that the market will
continue higher during October/November, this is helped by
resistance disappering on Thursday.

However, my preferred pattern before any continued UP trend would be
to have a lower Weekly close and test the Weekly lows in the early part
of the Month, and then continue higher in the later half of
October/November.

Whether the preferred pattern plays out, I'll just have to wait and
see, because the line of resistance for September has ended, and the
trend will follow the line of least resistance.

 

[Frank D]

SPI monthly

SPI continues to consolidate over the past couple of weeks between
the September high levels.

There is an expectation that price will continue towards the October
highs based on the breakout and extend pattern from July:- break
in the 3-month cycles will normally continue to move towards the highs in the
next 3-month cycle.

Along the way I like to have preferred patterns to trade the larger cycles,
my first preferred pattern was the Yearly 50% level @ 4455 to resist
price and then trade longs from the monthly 50% level for the next
move upwards.

However that didn’t occur, and once above 4455 at the end of August
the trend was going higher, helped by the S&P moving into it’s own
Yearly 50% levels which was lagging at the time.

Capturing the rest of the trend is based on the smaller thrust patterns
using the weekly 50% levels and Weekly open strategies, helped by
set-ups within the S&P 500

And the same applies in the 4th quarter.

Expectation of a higher move to complete the break and extend pattern
from July, but as pointed out in the previous post, my preferred pattern is
to see a ‘dip’ early in October.

A dip doesn't have to be large, i would just like to see a retest of the
3-week lows.

 

[Frank D]

DOW Weekly and 5-day pattern

Early push down in October and into the Weekly lows.

I have an expectation that US market will continue higher into October,
but that's going to depend on how Friday closes.

There is a potential move down into the October 50% level, however,
if Friday & Monday ends up being supported around this week's lows @ 9398
(5-day low on Friday)

Then I need to see a Weekly HOOK pattern back above 9581 (next Week),
to get the last leg of the July breakout pattern to complete higher in October.

Note:- it not a forgone conclusion that the last leg will complete
upwards because the S&P has failed at the 3-year 50% level (precise
highs @ 1073) and now below the Yearly 50% level @ 1038 starting the 4th quarter.

Therefore next week's HOOK has to be back above 1038 on the S&P, otherwise have to respect the Primary Trend.

 

[Frank D]

S&P Weekly and 5-day pattern

S&P has moved down into the 3-week lows (1012), which is the pattern
that I wanted to see happen at the start of October.

In a Bull market, this level will normally hold & form a support base over
the next 3-days and then continue higher in the same month to complete
the 3-monthly cycle:- break and extend pattern from July
into October/November highs.

In a bull market what I would normally look for is the 3-day high range
to drop below 1038-1039 and then trade longs on the break. This
is based on verifying support on a large timeframe (weekly), and
then validate support in a lesser timeframe:- 3-day high breakout.

However, the S&P isn’t in a bull-market trend, all it has done is reverse
back into the Yearly 50% levels and reject back down. The Primary cycle
and trend is defined by the Yearly timeframe.

If the Trend is going to continue down then the same pattern can
occur:- consolidate for 3-days below 1038 and then continue down
once again towards the October 50% level.

At this stage the important part was Friday remaining above
1012 and Friday's 5-day low support.

 

[Frank D]

S&P Weekly and 5-day pattern

3-week low support and an early rotation back into 1038.

As per my ideal pattern, I would like to see the 3-day cycles drop down
and match 1038 and then look for any breakouts if US markets are going
to go higher in the 4th Quarter.

3-day cycles @ 1055.

Tuesday is either going to stall below 1039, and then see the 3-day
cycles drop down on Wednesday, and then the next set-up will be
on Thursday.

or Tuesday goes looking for the 3-day cycles @ 1055, as last week's
support has been validated and rising up from a lower Weekly open.

However, based on today's close below 1039 I don't favour the happening.
If Monday had closed above 1039, then a move towards 1055 is more likely.

 

[Frank D]

S&P Weekly and 5-day pattern

Expectation of a 4th Quarter up move after reaching the 3-week lows
last week, however based on Monday’s close below1039, I was expecting a
3-day drop pattern and then trend to continue higher from Thursday.

However, once above 1039 on Tuesday the 2nd day reversal pattern
back towards 1055 played out.

At this stage US markets look well supported with an expectation
price should follow the last leg of the July breakout pattern into
October highs.

If the trend is going to continue higher, then we need to see a daily
close above 1055 and then a short-term 2-3 day consolidation above 1039.

 

[Frank D]

SPI Weekly and 5-day pattern

SPI completes the same moves as the S&P with a swing back into the
3-day cycles (Thursday’s highs)

A close above this level today (4763) and it will swing the 3-day
cycle around, and even though I’m bullish in the 4th Quarter I’ll be
looking for any hint of a short-term reversal pattern from tomorrow back into
support levels.

I wanted to see the S&P close above the 3-day highs @ 1055
(closed above today), and then look for a short-term
reversal into support levels from the next day.

This should hopefully provide another swing support for a
continuation upwards in October and complete the breakout and
extend pattern from July.

However, a lower Weekly open from Support & 3-week lows
(US markets) often moves up into a higher Friday close, as the line of
least resistance from September has disappeared.

 

[Frank D]

SPI Weekly and 5-day pattern

Selling on the higher open on Friday after yesterday's close above the
3-day cycle @ 4768.

Normally I would look for Set-up A to playout and then move into
Set-up B for next week

However, It wouldn’t surprise me to see the SPI remain above the 3-day highs today, as the Range down matches.

Yesterday saw US markets have some early resistance on Thursday, as I
was looking for a short-term reversal pattern, but when Thursday
moved down but then closed back above the 3-day highs, this normally
leads to a higher move on Friday, which is what normally happens after
a bounce off the 3-week lows.

 

[Frank D]

S&P Weekly and 5-day pattern

As per Weekly report, there was a bias to continue upwards over
Monday and Tuesday.

Price has remained range bound within the 5-day range, along with the
highs (random resistance).

I don't have a 2-day probability pattern for the rest of this week, other
than using the levels:- support/ resistance.

If the S&P is going to reach the October highs it might take another week
for that to happen:- shift in the Weekly range.

1083-1092 remains resistance levels for this week

 

[Frank D]

S&P Weekly and 5-day pattern

S&P continues to creep upwards as reporting season breathes more life
into the markets.

Wednesday pushed upwards hit resistance in the 5-day pattern and
some early selling pressure, but a late move above will push prices higher
on Thursday.

As of Thursday, I would be to look for the same patterns and continue to
use market dynamics as resistance levels in the 5-day pattern, and begin
to hold positions contracts into the close.

That’s simply because on Thursday, the 3-month cycle from July into October will have played out @ 1092:- break and extend pattern.

There’s no view that there will be a major reversal down on Thursday or
even this week, but it’s something to be aware that any short-term
reversal being 1-2 days or more will start from a level within the model.

I have a 4th Quarter extension pattern that can take the S&P towards
1141, but if it’s going to go towards that level I feel it's more likely to
kick upwards from November.

At this stage I have 3 Weekly set-ups coming into play based on this
Friday’s close and this new 3-month cycle (4th Quarter)

 

[Frank D]

SPI monthly and 5-day pattern

As previously explained, October highs complete the 3-month break
and extend patterns from July, and I would begin to look for
another consolidation pattern or reversal patterns into the November
50% levels (or lower)

That will now depend on the S&P 500.

I made the assumption that a Wednesday high breakout will move higher
on Thursday. I also made the assumption a couple of days ago that once
the S&P reaches 1092 on Thursday, the 3-month cycle has ended and
there is a potential reversal down.

I don’t know if that’s going to happen, all I can do is work with the
lines of resistance, my ‘assumption’, the ‘price action’ unfolding, and
run stops accordingly.

Otherwise there will be another extended pattern upwards in October @
5032 in the SPI, if US markets follow the continuation of higher prices
on Friday.

 

[Frank D]

SPI monthly and 5-day pattern

As per weekly report, my expectation that this week would remain range
bound within the 5-day ranges and consolidate around the upper
resistance levels until November.

Same patterns in the US markets with intra-day swing trading within the
5-day range.

Today being Friday there are 3 options based on the Weekly close in the
S&P tonight

1. Friday closes higher
2. Friday closes in the middle of the 5-day range
3. Friday continues to rotate and moves down into a lower Friday close.

Because the markets are already trading around October resistance levels,
I would prefer to trade options 2 & 3 rather than 1.

 

[Frank D]

S&P monthly and Weekly

US markets reversed down on Friday and into a lower Friday close, but
I expected more selling today with price to be trading or closing around
the Weekly 50% level.

The 3-day sell cycle and higher Friday open normally favours a lower
Weekly close as price is trading around monthly high resistance levels.

I only finished writing a section in my new book “ TIME, PRICE,
SUPPORT, RESISTANCE, and reversal patterns after the completion of the
3-month cycles…

Each reversal down started from this exact same pattern:- higher
Thursday close and Friday sell off.

And the trend continues down early next week with a break of the
Weekly 50% level and a short-term mini collapse down into the Monthly
50% levels (SET-UP A)

Except this time the exact same pattern hasn't occurred as previously
with the follow through down into the weekly 50% level not occurring

However, next week's 50% level is the one to watch with the potential
SET-UP A in play.

Normally the break occurs in the first two days of the new week, so i'll have a
fair idea whether SET-UP A is going to occur, or
price continues to consolidate and remain with SET-UP B.