- Joined
- 23 October 2005
- Posts
- 859
- Reactions
- 0
Hello Frank,
would you care to expand and eloborate on EW being late and lagging???
Cheers
AMT Model & Methodology
- Thread starter Frank D
- Start date
Hello Frank,
would you care to expand and eloborate on EW being late and lagging???
Cheers
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,400
- Reactions
- 6,317
Frank
Firstly it wasnt me!
But have a take on this.
In the building industry I'm a staunch enforcer of Builders liciencing.
I have one.
It costs me squillions to have mine,my companies,and my supervisors correctly licienced and compliant.Let alone the constant learning and keeping up with the building code.
I compete against unlicienced builders who dont conform to Building practices and dont compete within the industry with myself or any other licienced builders on a level playing field.
If I was in an industry which needs to be licienced and I was competing with someone who believed that they should be able to do as I do without being licienced---I'd be Pissed---as if your were the holder of the licience you to would be.
Your passionate articulate and a leader in your field Frank,unfortunately the realities of the world of regulation catches us all.
keep it up--love your work and will buy your book.
Firstly it wasnt me!
But have a take on this.
In the building industry I'm a staunch enforcer of Builders liciencing.
I have one.
It costs me squillions to have mine,my companies,and my supervisors correctly licienced and compliant.Let alone the constant learning and keeping up with the building code.
I compete against unlicienced builders who dont conform to Building practices and dont compete within the industry with myself or any other licienced builders on a level playing field.
If I was in an industry which needs to be licienced and I was competing with someone who believed that they should be able to do as I do without being licienced---I'd be Pissed---as if your were the holder of the licience you to would be.
Your passionate articulate and a leader in your field Frank,unfortunately the realities of the world of regulation catches us all.
keep it up--love your work and will buy your book.
- Joined
- 7 June 2007
- Posts
- 336
- Reactions
- 0
Sorry to hear it Frank.
I hope you'll continue to contribute to the forum in spite of this - the information you have provided here for free is amongst the best I have come across in print or on the internet.
Many thanks for all of the time you've invested in sharing your knowledge & insight, it is most appreciated.
I hope you'll continue to contribute to the forum in spite of this - the information you have provided here for free is amongst the best I have come across in print or on the internet.
Many thanks for all of the time you've invested in sharing your knowledge & insight, it is most appreciated.
John,
I totally understand the rules and regulations regarding ASIC, it just means I’ll stop posting my views on the market .
There is nothing wrong in posting a chart showing support and resistance levels without giving advice on ‘BUYING’ or ‘Selling’. I’ve spoken to ASIC about this.
~~~~~~~~~~~~
Cheers CFD and Julius!
~~~~~~~~~~~~
Wavepicker….
The Three most important technical parameters in the market are Price Time and Volume.
Most methods worth their value have at least two of those parameters, the majority won’t have three.
Elliot Wave has only 1, it is missing two of the most important parameters in technical analysis.
The EW Methodology is purely based on price and price waves with no ‘time’ or volume components used in the theory, Therefore it’s lagging because ‘time’ is the only thing that can be calculated into the future, Elliot wave is missing important parameters in technical analysis.
For many ‘Time’ is still a component that is confusing or they don’t know how to fully utilize it. I’m not talking about Gann and subjective analysis, I’m simply talking about timeframes and trends based on Weekly, Monthly, Quarterly and Yearly.
It’s not about the Price traded but the Time of the trade!
A lot of people still don’t understand this term either.
Elliot Wave isn’t a forward looking methodology, you can argue this until you are blue in the face, it’s a lagging methodology because its entire theory is based on past ‘Price’ action. I’ve spent a few years with Elliot Wave in the 90’s, it looks good on a chart with all the fancy 5 wave patterns, but those patterns can only be calculated after the event has taken place. It’s certainly not a Dynamic trading methodology.
Incorporate Elliot Wave with some form of ‘Time’ component and you’re on a winner, if you can do that, then you can call it the Wave-picker cycle model, however it needs to be an objective Model along with clear and precise trading rules, that everyone can use. When those patterns occur then everyone should be doing the same thing. Time and EW need to be combined as one and not separated to be a far more robust trading methodology.
EW on it’s own is not a generic model that everyone can use, it’s too subjective.
Market Profile is another subjective methodology but it’s a completely different methodology, but at least it incorporates Volume. In saying that, there are successful traders who use both forms, but you might as well use previous support and resistance levels and cut out all the junk in between, it will be far less confusing, hence why I think MP is far more valid than EW, especially for day trading.
For long term trading you might as well use previous support and resistance and a simple trailing filter as a stop, as Tech A demonstrates in his long term model.
There is nothing wrong with Elliot Wave, most methods should only be used as trading tools, but a number of different Elliot wave traders will give a number of different opinions. There are no generic trading rules, only Theory rules. Try teaching Elliot Wave to a newbie and it will take years trying to figure out how to best utilize the theory.
Trends, Support and Resistance is what the trader needs to focus on, and money management.
A Price-‘HOOK’ around previous support or resistance level will say more about the market than EW.
Elliot wave traders only surface after the events have taken place and then make subjective calls about was has happened based on patterns that have already occurred. The current price action is a perfect example. The most recent Elliot wave analysis in this forum is lagging the market by three weeks and continues to be subjective.
You have to be a very good trader to fully utilize EW, and that comes with years of trading experience under the belt.
People starting out would be better to use support and resistance and stop wasting their money on EW seminars. Wasn’t it recently that you went to an introduction course on EW and the GURU teacher spoke about the ‘currents and the river’ to describe price action, and only to make you pay $1000’s to do the trading course.
If it’s not black and White then go back to the basics.
Jusy my View...
Frank
I totally understand the rules and regulations regarding ASIC, it just means I’ll stop posting my views on the market .
There is nothing wrong in posting a chart showing support and resistance levels without giving advice on ‘BUYING’ or ‘Selling’. I’ve spoken to ASIC about this.
~~~~~~~~~~~~
Cheers CFD and Julius!
~~~~~~~~~~~~
Wavepicker….
The Three most important technical parameters in the market are Price Time and Volume.
Most methods worth their value have at least two of those parameters, the majority won’t have three.
Elliot Wave has only 1, it is missing two of the most important parameters in technical analysis.
The EW Methodology is purely based on price and price waves with no ‘time’ or volume components used in the theory, Therefore it’s lagging because ‘time’ is the only thing that can be calculated into the future, Elliot wave is missing important parameters in technical analysis.
For many ‘Time’ is still a component that is confusing or they don’t know how to fully utilize it. I’m not talking about Gann and subjective analysis, I’m simply talking about timeframes and trends based on Weekly, Monthly, Quarterly and Yearly.
It’s not about the Price traded but the Time of the trade!
A lot of people still don’t understand this term either.
Elliot Wave isn’t a forward looking methodology, you can argue this until you are blue in the face, it’s a lagging methodology because its entire theory is based on past ‘Price’ action. I’ve spent a few years with Elliot Wave in the 90’s, it looks good on a chart with all the fancy 5 wave patterns, but those patterns can only be calculated after the event has taken place. It’s certainly not a Dynamic trading methodology.
Incorporate Elliot Wave with some form of ‘Time’ component and you’re on a winner, if you can do that, then you can call it the Wave-picker cycle model, however it needs to be an objective Model along with clear and precise trading rules, that everyone can use. When those patterns occur then everyone should be doing the same thing. Time and EW need to be combined as one and not separated to be a far more robust trading methodology.
EW on it’s own is not a generic model that everyone can use, it’s too subjective.
Market Profile is another subjective methodology but it’s a completely different methodology, but at least it incorporates Volume. In saying that, there are successful traders who use both forms, but you might as well use previous support and resistance levels and cut out all the junk in between, it will be far less confusing, hence why I think MP is far more valid than EW, especially for day trading.
For long term trading you might as well use previous support and resistance and a simple trailing filter as a stop, as Tech A demonstrates in his long term model.
There is nothing wrong with Elliot Wave, most methods should only be used as trading tools, but a number of different Elliot wave traders will give a number of different opinions. There are no generic trading rules, only Theory rules. Try teaching Elliot Wave to a newbie and it will take years trying to figure out how to best utilize the theory.
Trends, Support and Resistance is what the trader needs to focus on, and money management.
A Price-‘HOOK’ around previous support or resistance level will say more about the market than EW.
Elliot wave traders only surface after the events have taken place and then make subjective calls about was has happened based on patterns that have already occurred. The current price action is a perfect example. The most recent Elliot wave analysis in this forum is lagging the market by three weeks and continues to be subjective.
You have to be a very good trader to fully utilize EW, and that comes with years of trading experience under the belt.
People starting out would be better to use support and resistance and stop wasting their money on EW seminars. Wasn’t it recently that you went to an introduction course on EW and the GURU teacher spoke about the ‘currents and the river’ to describe price action, and only to make you pay $1000’s to do the trading course.
If it’s not black and White then go back to the basics.
Jusy my View...
Frank
- Joined
- 23 October 2005
- Posts
- 859
- Reactions
- 0
Hello Frank,
Firstly I thank you for taking the time to respond to the question.
I have not looked at your AMT methodology yet and hope to in the future. ASIC can be a bit too hard sometimes and obviously someone has taken you to task.
You mentioned the three most important technical parameters in the market:-
-Price
-Time
-Volume
Essentially this may form the basis of the AMT method??
In my own experience (including Magdorans), the following parameters in this order are the most important
-Pattern
-TIME
-Price level
Volume is used more as a confirming mechanism.
For the most part I don’t disagree with your comments regarding Elliott Wave, except that I was taught to incorporate Volume Analysis with EW analysis and RN Elliott himself also used some form of volume analysis(although quite primitive and also generic to what other TA schools teach).
With regard to EW being lagging, I might have to disagree here. Yes it’s true that EW is dealing with past patterns, and these patterns have to complete (or at least be partially developed) in order to form an interpretation of the type of pattern one is dealing with. By identifying the TYPES of patterns that are being formed or have been formed, then it’s possible to come up with possibilities of the types of patterns and their magnitude that may follow.(ie look at forward timeframes) Various types of patterns repeat over and over with similar types of moves that may follow them. (I am not implying certainty here just that this is something that may happen more often than not)
Most newbies spend too much time trying to count waves and trying to figure out which wave they are in. This is only of secondary importance and only relevant to determine the degree of trend one is dealing with. The keys are in the patterns, and one starting out should focus more on pattern analysis. Approaching EW from this angle is a better option IMO, Two posters with whom I have been involved with in this forum are learning EW in this way and have picked up very quickly (within 1 year)
The analysis IS subjective, but any TA methodology is subjective to some degree. Remember we are dealing with probabilities of future patterns, there are no certainties and we are looking for circumstances from which to trade.
This is not always the case. Some classic examples of EW have been posted on this web site by various Elliotticians, well before we had any hard moves
In the XAO analysis thread EW charts were posted on the 15th July saying a high probability pattern was in place that would lead to a significant decline.
See the following thread:
https://www.aussiestockforums.com/forums/showthread.php?t=4888&page=30
and refer to the following posts:
#597, 603, 607, 676, 679
A target for the DJIA even indicated on that chart in question. That target was 14000(There is a red number 5 at 14000 on post #603). Magdoran even chose the date 16th July. Post #679 on the 25th July identified the move down as the most “significant” of the year, BEFORE the really hard moves down started. The rest is history. These patterns were based on EW analysis, the hard moves down that followed were forecast using EW analysis, and when this call (among many other calls that we have made on this forum) was laughed at and questioned by certain posters. As far as I can find in this forum there were no other systems/methodologies that made mention of the happenings before the big move down. One may say this was a one off and that we just got lucky, but throughout this forum over the last 2 years there have been numerous equally as good calls to such as in:-
-Gold (May last year) to the week
-Silver (May Last year) to the week
-Feb 2007 Stock market top to the day (Exact price and day was identified by Mag 2 months ahead)
-various stocks i.e. ZFX, OXR, TLS
but to name a few
BHP and RIO, two of the market heavies had long term patterns in place as far back as a year ago, that gave a good probability that their last “blowoff” move upward would be their last. I am unaware of any other method that could have identified this phenomenon
These results speak for themselves and IMO are well beyond chance.
I fully agree with your comments regarding the use of time. For years I struggled with EW analysis in isolation. (That is not to say that EW is grossly inadequate in any way if used on its own using price and pattern). However the introduction of Cycles Analysis- incorporating a channeling type method and decomposing price data into dominant cycles has helped immensely. This is done for various timeframes i.e daily, weekly monthly, as such the one knows if the major cycles are currently up or down in a particular timeframe. For instance, the monthly chart in the XAO is showing cycles that are pointed hard down at present, but the dailies are still rising, thus giving one the added knowledge that this rebound maybe a countertrend and that more downside will follow in the weeks/months ahead.
As well as this, a realization that minutia in the market(in terms of time points relative to fixed cycles ) actually repeat into the future at various degrees of trend.( I am still trying to learn this and appreciate Mag for his help and knowledge in this area- I call him the master of time!!) This has allowed me to view the market dynamics with a fresh pair of eyes over the last few years. Reciprocally, Mag has benefited from a further understanding (on top op of his own) of EW patterns, thus at times quantifying the potential of big moves following key dates he has identified.
In the end it really depends which method(s) one is comfortable with using
Regards
Wavepicker
Firstly I thank you for taking the time to respond to the question.
I have not looked at your AMT methodology yet and hope to in the future. ASIC can be a bit too hard sometimes and obviously someone has taken you to task.
You mentioned the three most important technical parameters in the market:-
-Price
-Time
-Volume
Essentially this may form the basis of the AMT method??
In my own experience (including Magdorans), the following parameters in this order are the most important
-Pattern
-TIME
-Price level
Volume is used more as a confirming mechanism.
For the most part I don’t disagree with your comments regarding Elliott Wave, except that I was taught to incorporate Volume Analysis with EW analysis and RN Elliott himself also used some form of volume analysis(although quite primitive and also generic to what other TA schools teach).
With regard to EW being lagging, I might have to disagree here. Yes it’s true that EW is dealing with past patterns, and these patterns have to complete (or at least be partially developed) in order to form an interpretation of the type of pattern one is dealing with. By identifying the TYPES of patterns that are being formed or have been formed, then it’s possible to come up with possibilities of the types of patterns and their magnitude that may follow.(ie look at forward timeframes) Various types of patterns repeat over and over with similar types of moves that may follow them. (I am not implying certainty here just that this is something that may happen more often than not)
Most newbies spend too much time trying to count waves and trying to figure out which wave they are in. This is only of secondary importance and only relevant to determine the degree of trend one is dealing with. The keys are in the patterns, and one starting out should focus more on pattern analysis. Approaching EW from this angle is a better option IMO, Two posters with whom I have been involved with in this forum are learning EW in this way and have picked up very quickly (within 1 year)
The analysis IS subjective, but any TA methodology is subjective to some degree. Remember we are dealing with probabilities of future patterns, there are no certainties and we are looking for circumstances from which to trade.
This is not always the case. Some classic examples of EW have been posted on this web site by various Elliotticians, well before we had any hard moves
In the XAO analysis thread EW charts were posted on the 15th July saying a high probability pattern was in place that would lead to a significant decline.
See the following thread:
https://www.aussiestockforums.com/forums/showthread.php?t=4888&page=30
and refer to the following posts:
#597, 603, 607, 676, 679
A target for the DJIA even indicated on that chart in question. That target was 14000(There is a red number 5 at 14000 on post #603). Magdoran even chose the date 16th July. Post #679 on the 25th July identified the move down as the most “significant” of the year, BEFORE the really hard moves down started. The rest is history. These patterns were based on EW analysis, the hard moves down that followed were forecast using EW analysis, and when this call (among many other calls that we have made on this forum) was laughed at and questioned by certain posters. As far as I can find in this forum there were no other systems/methodologies that made mention of the happenings before the big move down. One may say this was a one off and that we just got lucky, but throughout this forum over the last 2 years there have been numerous equally as good calls to such as in:-
-Gold (May last year) to the week
-Silver (May Last year) to the week
-Feb 2007 Stock market top to the day (Exact price and day was identified by Mag 2 months ahead)
-various stocks i.e. ZFX, OXR, TLS
but to name a few
BHP and RIO, two of the market heavies had long term patterns in place as far back as a year ago, that gave a good probability that their last “blowoff” move upward would be their last. I am unaware of any other method that could have identified this phenomenon
These results speak for themselves and IMO are well beyond chance.
I fully agree with your comments regarding the use of time. For years I struggled with EW analysis in isolation. (That is not to say that EW is grossly inadequate in any way if used on its own using price and pattern). However the introduction of Cycles Analysis- incorporating a channeling type method and decomposing price data into dominant cycles has helped immensely. This is done for various timeframes i.e daily, weekly monthly, as such the one knows if the major cycles are currently up or down in a particular timeframe. For instance, the monthly chart in the XAO is showing cycles that are pointed hard down at present, but the dailies are still rising, thus giving one the added knowledge that this rebound maybe a countertrend and that more downside will follow in the weeks/months ahead.
As well as this, a realization that minutia in the market(in terms of time points relative to fixed cycles ) actually repeat into the future at various degrees of trend.( I am still trying to learn this and appreciate Mag for his help and knowledge in this area- I call him the master of time!!) This has allowed me to view the market dynamics with a fresh pair of eyes over the last few years. Reciprocally, Mag has benefited from a further understanding (on top op of his own) of EW patterns, thus at times quantifying the potential of big moves following key dates he has identified.
In the end it really depends which method(s) one is comfortable with using
Regards
Wavepicker
Wavepicker,
As you say, you struggled with EW until you began using TIME parameters. But those Time parameters are completely separate from EW.
From your work and others, the component of time is a precise parameter in the market, nothing can change TIME, a month is a month, a week is a week, the only thing that changes is one month ends the next begins, therefore it’s the only thing in the market that is constantly moving forward.
This conversation is a totally different area that go on for pages, which I don't really want to be a part of.
~~~~~~~~~~~~~~~~~
Back to the market…..
not expecting too much downside, any rotation will be back into the Friday's lows 6071 which will be the 3-day lows and move into a
consoldiation phase into end of the week and into September. (25th August)
This week has seen a sideways pattern and perfect Spiral-points on Primary range.
August resistance disappears at the close of today and swings around into a lower ‘support’ zone next week
Expected test this level next week…
Can't post my view on next weeks trading because i'll get into Trouble!
Frank Dilernia
As you say, you struggled with EW until you began using TIME parameters. But those Time parameters are completely separate from EW.
From your work and others, the component of time is a precise parameter in the market, nothing can change TIME, a month is a month, a week is a week, the only thing that changes is one month ends the next begins, therefore it’s the only thing in the market that is constantly moving forward.
This conversation is a totally different area that go on for pages, which I don't really want to be a part of.
~~~~~~~~~~~~~~~~~
Back to the market…..
not expecting too much downside, any rotation will be back into the Friday's lows 6071 which will be the 3-day lows and move into a
consoldiation phase into end of the week and into September. (25th August)
This week has seen a sideways pattern and perfect Spiral-points on Primary range.
August resistance disappears at the close of today and swings around into a lower ‘support’ zone next week
Expected test this level next week…
Can't post my view on next weeks trading because i'll get into Trouble!
Frank Dilernia
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,400
- Reactions
- 6,317
People you can argue the Pro's and Con's of various methods infinitum.
But application of analysis is in my veiw far more important that Time,Price,Pattern,or volume.
If traders cant apply analysis it has no value,regardless of the components of that analysis.
Unless ofcourse you analyse for the sake of analysis.
But application of analysis is in my veiw far more important that Time,Price,Pattern,or volume.
If traders cant apply analysis it has no value,regardless of the components of that analysis.
Unless ofcourse you analyse for the sake of analysis.
personally I can't see what the problem is Frank, this is a free BB, no-one here is paying you for advice. surely if someone wants to give a free opinion of potential behaviour then that's their business.
Last week saw the market move up on the last day of August
and push higher into the August highs of 6255 (weekly charts).
Once
the monthly timeframe ended the timeframe dynamics shift and we
have new levels, with any extended up move sending the market
upward and higher, this will occur because future contracts
are running at a premium to the SPOT contracts, so the closer
the market comes to expiry the higher the market will be.
However, firstly I’d like price to come back into September 50% levels.
When markets close on the their highs on Friday there is
an expectation that Monday or Tuesday will rotate back down
into the 3-day lows, with the extended push down depending on how
US market act in early September (tonight or tomorrow)
Weaker US markets will send the SPI back into 6070, strong
US markets and the SPI will make higher highs into Friday.
Friday rallied from a lower Spiral point, next spiral point
on Monday pushed the market down 44 points into the high of
the Dilernia Pivot before bouncing and moving into another higher
Spiral point at the top on Tuesday.
This time the Dilernia pivot changed into resistance and Tuesday looks
like the spiral top along with pivot resistance is the first stage of a
greater rotation back down or back into the 3-day lows.
This will depend on US markets over the next couple of days.
Educational post, not advice
Frank Dilernia
and push higher into the August highs of 6255 (weekly charts).
Once
the monthly timeframe ended the timeframe dynamics shift and we
have new levels, with any extended up move sending the market
upward and higher, this will occur because future contracts
are running at a premium to the SPOT contracts, so the closer
the market comes to expiry the higher the market will be.
However, firstly I’d like price to come back into September 50% levels.
When markets close on the their highs on Friday there is
an expectation that Monday or Tuesday will rotate back down
into the 3-day lows, with the extended push down depending on how
US market act in early September (tonight or tomorrow)
Weaker US markets will send the SPI back into 6070, strong
US markets and the SPI will make higher highs into Friday.
Friday rallied from a lower Spiral point, next spiral point
on Monday pushed the market down 44 points into the high of
the Dilernia Pivot before bouncing and moving into another higher
Spiral point at the top on Tuesday.
This time the Dilernia pivot changed into resistance and Tuesday looks
like the spiral top along with pivot resistance is the first stage of a
greater rotation back down or back into the 3-day lows.
This will depend on US markets over the next couple of days.
Educational post, not advice
Frank Dilernia
1st September 2007..
The DOW is trading above the Quarterly 50% level, and
if it’s going to head all the way back towards 13740, then
it’s going to move upwards next week from 13340.
Exactly the same expectation on ES, 1471 is the critical
and defining level for September, above and it’s going to be
a trending week upwards towards 1510.25.
That is the reason why today or tomorrow on US markets was going to
be the day on further rises in US markets, the change in monthly cycles,
from August 50% resistence, to September 50% support as it
rotates back upwards along with December contracts running at a premium.
US markets are sometimes much more orderly using the Dilernia
Model espeically the S&P.
Frank Dilernia
The DOW is trading above the Quarterly 50% level, and
if it’s going to head all the way back towards 13740, then
it’s going to move upwards next week from 13340.
Exactly the same expectation on ES, 1471 is the critical
and defining level for September, above and it’s going to be
a trending week upwards towards 1510.25.
That is the reason why today or tomorrow on US markets was going to
be the day on further rises in US markets, the change in monthly cycles,
from August 50% resistence, to September 50% support as it
rotates back upwards along with December contracts running at a premium.
US markets are sometimes much more orderly using the Dilernia
Model espeically the S&P.
Frank Dilernia
SPI has done the higher open and sell-off from the higher spiral-point @6353 and pivot high.
The standard rotation of 44 points has completed, lower risk level
6322, previous pivot high, whilst trading below this level expectation
market is heading back into 6279
3-day lows are 6240
Frank
The standard rotation of 44 points has completed, lower risk level
6322, previous pivot high, whilst trading below this level expectation
market is heading back into 6279
3-day lows are 6240
Frank
Edwood,
If the weekly timeframe closes on its highs or lows I always look for
a rotation back into the 3-day lows or highs (swing) trade. I want to
sell higher opens and buy lower opens depending on the trend.
I also like trends to develop from lower weekly opens, not higher
weekly opens as is the case this week, and I also like major trends
to develop from lower Monthly opens, not higher monthly opens, as is
the case this month.
As the old adage goes buy, low sell high.
Day trading….
There are swing points in the market each day that selling or buying
appears based on the ATR of the market, but the ‘follow-through’
doesn’t always occur, however a chunk of the ‘follow-though’ appears,
that chunk is 44 points, it is a money pattern and potential $1100 per
range per contract. I talk about money patterns in the book, as long as
price is moving away from the spiral point the money pattern has
to complete, As was the case, not only from yesterdays highs, but also
once it started trading below 6322, it had to move down another minimum
44 points.
As long as the trader gets a partial exit around those ranges using
primary range (spiral points) then the rest of the direction can continue,
as occurred yesterday, or it doesn’t, as it occurred on Monday and
Tuesday.
The Spiral point and I’ve described this before is one of the most
important patterns in the market…. Why???? because they become
ideal entry points; important because of least capital risk, and
important because they’re closest to your initial stop loss point.
For instance, today will be the first lower open and lower spiral point
this week, this becomes a high probability pattern with a
continuation upward a minimum 44 points, last week each lower spiral
point provided perfect lows and continuation of the upward trend.
However, last week the expectation that there could be a move towards the August highs @ 6255.
This week the expectation that there could be a rotation back into 6071,
so lower spiral points are still probability patterns to go long from, but if
the SPI does head down into 6071, I won’t be going long below the
Spiral point. So the Spiral point becomes an entry but it also becomes a
risk level so my stop becomes robust.
Three scenarios today:
#1 lower open and market moves up 44 points and continues higher into
6278 tomorrow
#2 lower open moves up 44 points and reverses back down and takes
out lows and continues lower.
#3 heads lower from 6209
If it heads lower, I’ll be stopped out, and I know I won’t trade again today.
Frank Dilernia
If the weekly timeframe closes on its highs or lows I always look for
a rotation back into the 3-day lows or highs (swing) trade. I want to
sell higher opens and buy lower opens depending on the trend.
I also like trends to develop from lower weekly opens, not higher
weekly opens as is the case this week, and I also like major trends
to develop from lower Monthly opens, not higher monthly opens, as is
the case this month.
As the old adage goes buy, low sell high.
Day trading….
There are swing points in the market each day that selling or buying
appears based on the ATR of the market, but the ‘follow-through’
doesn’t always occur, however a chunk of the ‘follow-though’ appears,
that chunk is 44 points, it is a money pattern and potential $1100 per
range per contract. I talk about money patterns in the book, as long as
price is moving away from the spiral point the money pattern has
to complete, As was the case, not only from yesterdays highs, but also
once it started trading below 6322, it had to move down another minimum
44 points.
As long as the trader gets a partial exit around those ranges using
primary range (spiral points) then the rest of the direction can continue,
as occurred yesterday, or it doesn’t, as it occurred on Monday and
Tuesday.
The Spiral point and I’ve described this before is one of the most
important patterns in the market…. Why???? because they become
ideal entry points; important because of least capital risk, and
important because they’re closest to your initial stop loss point.
For instance, today will be the first lower open and lower spiral point
this week, this becomes a high probability pattern with a
continuation upward a minimum 44 points, last week each lower spiral
point provided perfect lows and continuation of the upward trend.
However, last week the expectation that there could be a move towards the August highs @ 6255.
This week the expectation that there could be a rotation back into 6071,
so lower spiral points are still probability patterns to go long from, but if
the SPI does head down into 6071, I won’t be going long below the
Spiral point. So the Spiral point becomes an entry but it also becomes a
risk level so my stop becomes robust.
Three scenarios today:
#1 lower open and market moves up 44 points and continues higher into
6278 tomorrow
#2 lower open moves up 44 points and reverses back down and takes
out lows and continues lower.
#3 heads lower from 6209
If it heads lower, I’ll be stopped out, and I know I won’t trade again today.
Frank Dilernia
SPI opened much higher than expected, but the push down into
6201 completed the Spiral point, so whilst price is trading or moving
from that level the expectation is a 44 point move @ 6233 and
extended move will take it to 6279...
However the pivot is 6224, so a reversal from a 44 point swing point high
and trading below the Dilernia pivot, I don't want to be trading longs again
today, and the spiral point low of 6202 becomes invalid on Thursday
if price reverses back down into 6202
Basically if you want to be 'shorting', a R44 swing point high and drop
back under the pivot gives you a good reason to short, or not to be
trading longs again today.
But from now the outcome is random, I don't know whether price is going
to make an major move down, or consolidate between the pivot and
the Spiral low and head higher later.
But regardless, going long and parital exit around the R44 highs, I don't
care what happens the rest of the day, but it gives others ideal levels in the market to manage intra-day risk
Frank Dilernia
6201 completed the Spiral point, so whilst price is trading or moving
from that level the expectation is a 44 point move @ 6233 and
extended move will take it to 6279...
However the pivot is 6224, so a reversal from a 44 point swing point high
and trading below the Dilernia pivot, I don't want to be trading longs again
today, and the spiral point low of 6202 becomes invalid on Thursday
if price reverses back down into 6202
Basically if you want to be 'shorting', a R44 swing point high and drop
back under the pivot gives you a good reason to short, or not to be
trading longs again today.
But from now the outcome is random, I don't know whether price is going
to make an major move down, or consolidate between the pivot and
the Spiral low and head higher later.
But regardless, going long and parital exit around the R44 highs, I don't
care what happens the rest of the day, but it gives others ideal levels in the market to manage intra-day risk
Frank Dilernia
With every reason to move higher this week due to the change
of monthly timeframes this consolidating pattern and
sideways movement this week has now a ‘dilernia-drop’ in
the forward trading week. It is not a foregone conclusion but
a drop in the forward week often sends the market down into
the close of the trading week. If this is the case, then
if Friday prices are trading below the September 50% level
then downside expectation would be towards the 3-day lows and
3-week 50% levels. (7th September)
DOW...
Prices pushed down into the 3-day lows and 3-week 50% level
and supported, and with the break of the 3-day lows the
expectation is that there should be a rotation upwards next
week. Probability occurs after a change of cycle that the
market will rotate up 1-2 days….
How far that 1 day rotates is important because, a ‘hook’ and
close back inside the 3-week 50% level @ 13235 can send the
market back upwards towards the September 50% level again and
3-day highs, as occurred the previous week. (13235 as support).
This also aligns with a lower weekly open next week, because
if markets are consolidating and moving in a sideways pattern,
then a lower weekly open and the bias it to close upwards
into Friday next week.
There is a lot of talk around at the moment that 55 days out
from the start of the downside move, a 2nd wave of selling hits
the markets, most ‘crash patterns’ have historically followed this pattern, as pointed out by others.
55-days from the highs as pointed out is September 12, this
aligns with an up-day on Monday, but how far Monday moves upward
is critical, because the 3-week 50% level is going to
define the trend for the rest of the week (resistance)
ES
Prices followed the Dilernia drop into the 3-day lows, and
the exact same set-up next week as the DOW for next week, the
September 50% levels and especially the 3-week 50% level
should give trades a fair idea about the direction of the
market, after a 1-2 day upward rotation (random length)
Educational post
Frank Dilernia
of monthly timeframes this consolidating pattern and
sideways movement this week has now a ‘dilernia-drop’ in
the forward trading week. It is not a foregone conclusion but
a drop in the forward week often sends the market down into
the close of the trading week. If this is the case, then
if Friday prices are trading below the September 50% level
then downside expectation would be towards the 3-day lows and
3-week 50% levels. (7th September)
DOW...
Prices pushed down into the 3-day lows and 3-week 50% level
and supported, and with the break of the 3-day lows the
expectation is that there should be a rotation upwards next
week. Probability occurs after a change of cycle that the
market will rotate up 1-2 days….
How far that 1 day rotates is important because, a ‘hook’ and
close back inside the 3-week 50% level @ 13235 can send the
market back upwards towards the September 50% level again and
3-day highs, as occurred the previous week. (13235 as support).
This also aligns with a lower weekly open next week, because
if markets are consolidating and moving in a sideways pattern,
then a lower weekly open and the bias it to close upwards
into Friday next week.
There is a lot of talk around at the moment that 55 days out
from the start of the downside move, a 2nd wave of selling hits
the markets, most ‘crash patterns’ have historically followed this pattern, as pointed out by others.
55-days from the highs as pointed out is September 12, this
aligns with an up-day on Monday, but how far Monday moves upward
is critical, because the 3-week 50% level is going to
define the trend for the rest of the week (resistance)
ES
Prices followed the Dilernia drop into the 3-day lows, and
the exact same set-up next week as the DOW for next week, the
September 50% levels and especially the 3-week 50% level
should give trades a fair idea about the direction of the
market, after a 1-2 day upward rotation (random length)
Educational post
Frank Dilernia
morning Frank, thanks for your comments the other day, apologies for not coming back sooner have been a bit tied up lately. Put me down for a copy of your book when you get it finished, looks as tho it will be a good read
cheers, Ed
DOW & ES
US markets both completed the 2-day upswing from a lower
weekly open, both stalling at the monthly 50% levels.
DOW 13340 & ES @ 1471
The weekly 50% levels in both markets will play an important
role for the remained of the week, because a rotating
weekly timeframe, which closes higher on Friday will be
supported, as happen last week.
A weaker weekly timeframe will sell-off from the monthly 50%
levels an break back under the weekly 50% level and continue
down.
DOW 13235 ES 1464.
SPI
Market rotation going on from lower daily opens and higher
daily opens, with todays higher Spiral point @ 6325, any
rotation down towards 6184 if any weakness in US markets
tonight.
If 12th September is the doomsday using historical patterns, then
we should all know by tomorrow the likelihood of markets
coming under pressure once again…
Or it’s just the case of the markets moving in a
multi-sideways weekly pattern and more consolidation and
swing trading for a few more weeks, which I much prefer!
Frank Dilernia
US markets both completed the 2-day upswing from a lower
weekly open, both stalling at the monthly 50% levels.
DOW 13340 & ES @ 1471
The weekly 50% levels in both markets will play an important
role for the remained of the week, because a rotating
weekly timeframe, which closes higher on Friday will be
supported, as happen last week.
A weaker weekly timeframe will sell-off from the monthly 50%
levels an break back under the weekly 50% level and continue
down.
DOW 13235 ES 1464.
SPI
Market rotation going on from lower daily opens and higher
daily opens, with todays higher Spiral point @ 6325, any
rotation down towards 6184 if any weakness in US markets
tonight.
If 12th September is the doomsday using historical patterns, then
we should all know by tomorrow the likelihood of markets
coming under pressure once again…
Or it’s just the case of the markets moving in a
multi-sideways weekly pattern and more consolidation and
swing trading for a few more weeks, which I much prefer!
Frank Dilernia
Once the monthly timeframe ended the timeframe dynamics shift
and we have new levels, with any extended up move sending
the market upward and higher, this will occur because
future contracts are running at a premium to the SPOT contracts, so
the closer the market comes to expiry the higher the market will
be. (4th September)
I also like trends to develop from lower weekly opens,
not higher weekly opens as is the case this week, ….as the old
adage goes; buy low sell high. (September 6)
Last weeks trading on Global markets is a perfect example of
markets rising into Expiry as future contracts are running at
a premium, and the weekly timeframe starting from a lower open
and moving upwards into a higher weekly close.
For US markets, it was a case of waiting for the Hook and move
back inside the weekly 50% levels and continue upward back in
the highs once again.
I’d be happy for markets to continue and rotate for a number of
weeks after expiry, because if markets continue to move
upwards into the end of the trading year without more down
'weeks', then volatility with begin to dry up.
Up rising weekly trends and trading ranges drop, and we move
back into 4 days of small range days with 1 large trending-day
that keeps the Daily ATR in balance.
Frank Dilernia
and we have new levels, with any extended up move sending
the market upward and higher, this will occur because
future contracts are running at a premium to the SPOT contracts, so
the closer the market comes to expiry the higher the market will
be. (4th September)
I also like trends to develop from lower weekly opens,
not higher weekly opens as is the case this week, ….as the old
adage goes; buy low sell high. (September 6)
Last weeks trading on Global markets is a perfect example of
markets rising into Expiry as future contracts are running at
a premium, and the weekly timeframe starting from a lower open
and moving upwards into a higher weekly close.
For US markets, it was a case of waiting for the Hook and move
back inside the weekly 50% levels and continue upward back in
the highs once again.
I’d be happy for markets to continue and rotate for a number of
weeks after expiry, because if markets continue to move
upwards into the end of the trading year without more down
'weeks', then volatility with begin to dry up.
Up rising weekly trends and trading ranges drop, and we move
back into 4 days of small range days with 1 large trending-day
that keeps the Daily ATR in balance.
Frank Dilernia
Today September futures expire, and we move into December
contracts.
The same pattern of higher prices as it chases the forward
future contracts is playing out once again. Just another
re-occurring pattern so that forward modeling of future events
can be made.
Modeling pattern is the move towards October-December highs in
the next Quarter, and as already pointed out before, expected
higher prices in 2008.
Any rotations down occurring from higher weekly opens/monthly
opens after expiry, and my support zone is 6135 in the next
Quarter, and then looking for a new move higher into 2008….
Frank Dilernia
Just another 'better-guess'
contracts.
The same pattern of higher prices as it chases the forward
future contracts is playing out once again. Just another
re-occurring pattern so that forward modeling of future events
can be made.
Modeling pattern is the move towards October-December highs in
the next Quarter, and as already pointed out before, expected
higher prices in 2008.
Any rotations down occurring from higher weekly opens/monthly
opens after expiry, and my support zone is 6135 in the next
Quarter, and then looking for a new move higher into 2008….
Frank Dilernia
Just another 'better-guess'
Similar threads
