Improving Chart Analysis

[pacer]

OIL sux....give me solid gains.....not the flavour of the month....I look elsewhere!......:

 

[wayneL]

Hi Wayne,

Should have known you'd be out of the "Crypt"!

Very tired here - it's a trading bonanza at the moment, and I have too many opportunities to follow up on, so was doing my due diligence, and then thought I'd wrap up the oil trade example too...

Just don't like the way oil’s trading for the short side. I've also have a sneaking suspicion that copper and gold may shoot up from here.

That S&P 500 will be interesting to watch if oil makes a run up. But sometimes equity runs can foster economic prosperity since sufficient confidence is maintained to keep the wheels turning...

Maybe oil causes a pull back in the S&P 500??? Hard to know... But it’s been very bullish hasn’t it?

A definate Goldilocks thing going on in equities. I have several theories as to the eventual outcome, which cover every possible scenario... so I can't be wrong can I? LOL

But it is unnatural IMO. The PPT rocks... if you're a bull.

How do you like the charts by the way?



Regards


Magdoran

Well, if I knew what I was looking at......lol

But I know geometric approaches work well for those so inclined. So looks good

Cheers

 

[wayneL]

OIL sux....give me solid gains.....not the flavour of the month....I look elsewhere!......:

Oil neither sux or blows when you trade futures. I'm sure the shorters are ecstatic.

 

[Sean K]

Mag

Being the total cynic, I am expecting a post election oil bull :batman:

There has been a lot of talk of pre election manipulation on oil, gold, eco #'s & equities; which I am quite prepared to go along with.

The SP is the most suspicious looking chart I've seen for some time.

FWIW

I'm with you Wayne. But not necessary because the POI, POG, $US HAS been manipulated, but because there's a lot of talk that is has. That perception will be enough for $US sell off, and POG and POI increase.

To link this to the thread topic, I am also a big believer that charts are a somewhat self fulfilling prophecy. Becasue chart analysis has become something of a legitimate trading method, and the theories widely accepted, then people will natuarally use this understanding to trade this market psychology.

 

[barney]

Ongoing Light Crude Example - Time to exit...


I don’t like the way HU (Unleaded futures) has been trading recently. I have a theory that fuel drives the oil, and not the other way. Given the strong bullish move in unleaded futures overnight, I think it’s time to wind out the Crude oil short.

Interestingly when trading futures markets, the way the spot markets are figured out can mess up the charts, especially when a series of contracts expires, and a new front month takes over. The interesting thing about crude oil, is that as you move out further in time, the price seems to be ascending. The market seems to be expecting oil to rise in price again.

So, looking at the revised pattern with the December contract becoming the front month, we now have a higher low. Have a look at the December contract pattern for interest.

If we see a rally here, it may be a wave 4, find a high, and test down again, so any longs initiated here will be risky, and suggest a half exit approach at obvious resistance points would be a sensible approach.

The higher low could be taken to be a signal for a short term long. The October 12th increment seems to have had a greater significance, and the October 30th date will be interesting to see what transpires, depending on the way Crude oil trades into it.


Regards


Magdoran

Hi Mag, Can I say from a "novice" point of view that your explanations/charts etc. on oil make a lot of sense ........... Not that my opinion carries much weight !!, but I agree that the price of oil looks like it maybe bottoming (is that a real word??) Perhaps from a laymans point of view, I could make the comment that, the average man in the street, believes that it is only a matter of time before oil/price of fuel rises again (and probably substantially) so to be bearish on oil would be risky at the best of times in this modern age (??), so your analysis which shows us that it is becoming a risky proposition now (even after a sustained downturn), seems like good "advice" to me .......... I for one would not be game to back against oil rising over the short/medium term .............

Now, to a different slant ......... In keeping with my "lay my cards on the table" style of investing ........... I have short sold Amcor AMC atm (OK I know it was an up day and the market is trending upwards ............ call me stupid, I probably deserve it) but I still think this company has short term problems which can be seen in the charts as well .... four down days in succession (not today though) The moving averages are turning against the general market trend. ROC longer trend is diverging from price as is Momentum (not that I place a lot of importance on that, its just that it confirms my "wider" conception of what is happening ............ So I put myself up for judgement yet again in the hope I might learn something (Please be gentle on me cause I'm getting bruised Cheers Barney.

 

[Sean K]

AMC is in an interesting position. It's in a downward trend, but is hitting a key resistance and support area. I see it pausing around this area. Not ideal to go short IMO. It could be on it's way back to $6.50, but there's a chance that $6.75 could be a support area and possible rebound.

My in regard to very simple chart analysis.

I have no idea why it's dropped recently. I actually used to own this but sold out a year or so ago, because it was so boring.

 

[barney]

AMC is in an interesting position. It's in a downward trend, but is hitting a key resistance and support area. I see it pausing around this area. Not ideal to go short IMO. It could be on it's way back to $6.50, but there's a chance that $6.75 could be a support area and possible rebound.

My in regard to very simple chart analysis.

I have no idea why it's dropped recently. I actually used to own this but sold out a year or so ago, because it was so boring.

Thank for that Kennas, I confess I did not look at the previous resistance/support levels that closely (I was paying more attention to their apparent short term difficulties in reaching profit targets/competition etc. (I need to write a list of things to check!!!!) I notice back in July there was a resistance (perhaps now support) level of around $6.90 If it gets past that it may drop to $6.75 ish as you say ?? I'd be happy with that from a short point of view; anything under $6.90 from my point of view puts me in positive territory ........... my investment is only minimal, but it is all a learning experience, Cheers Barney

 

[swingstar]

AMC is my favourite stock. I'm currently short also (check out the AMC thread for my analysis). Right now it is in the middle of a large trading range where it has rebounded from in the past, so it's probably not an ideal entry point.

 

[barney]

AMC is my favourite stock. I'm currently short also (check out the AMC thread for my analysis). Right now it is in the middle of a large trading range where it has rebounded from in the past, so it's probably not an ideal entry point.

Thanks Swingstar, I checked out the AMC thread and your charts explain your position well ........... I know I may have missed the thrust of the downtrend, but just happy that I got the gist of the stock direction, even though it could bounce from here. Next day or two should tell a better story ..... Still looks a little room for downward movement considering the news reports and the fact it has been going against the market trend . Cheers Barney.

 

[Magdoran]

“Ignorance is Strength”


I’m not sure what is in the mind of some people who make bizarre comments on this thread, but let me reiterate what I’m doing here for those may not have followed the way this thread developed.

The Light Crude / Brent example was primarily a real time illustration of a type of technical analysis approach in action, as requested by Tech/A (Daffy) and Les. The idea was to contribute an alternative approach based on using a time factor in technical analysis combined with patterns. This thread is after all about chart analysis is it not?

Also, considering the far reaching impact that the price of oil/fuel has on the world economy, and the consequent impact this has on inflationary measures, I would have thought that tracking oil futures would be an integral factor in many markets, wouldn’t it?

If trading anything related to oil, if not trading the commodity itself, and utilising the marked decline in crude oil prices I would have thought yielded many significant trading opportunities, and will I would argue do the same again in the future.

Specifically, try correlating the decline in light crude with the way the DOW and other US stock markets have performed, not to mention various European indexes such as the FTSE and the DAX.

However, the primary purpose of posting the charts was not to examine oil, but to demonstrate a time based approach to technical analysis.


Regards


Magdoran

P.S. If the title seems odd, please refer to "1984" - George Orwell. Mag.

 

[Magdoran]

Ongoing Crude Oil Example


Light Crude moved strongly down on the 30th in the US, in what appears to be an exhaustive bar.

If the time cycle is correct, this may become a low (or the next day). This was the significant day previously posted.

Obviously the pattern is either going to resolve down for another leg down, or resolve up for a drive up from this point. The trick is to recognise as early as possible which way. It is of course possible that crude will trade sideways for a while too and either accumulate or distribute…

The congestion indicates to me some kind indecision. This is probably partly due to the oncoming winter in the northern hemisphere, and the consequent increase in energy needs. The ongoing higher inventory levels in fuel and oil and the recent media hype over OPEC’s comments to cut production appear to me to be a lot of theatre.

I suspect we may see a strong move come from this soon. If this low can hold, this could be bullish depending how crude trades over the next few days. A close below the existing major low may signal bearish probabilities.


Regards


Magdoran

 

[CanOz]

Anyone care to analyse these from a technical point of view?

BPT
MLS
SDL
CBH

 

[tech/a]

Well ill be a Daffy Duck.

Truely fascinating!!

 

[Magdoran]

Hi Mag, Can I say from a "novice" point of view that your explanations/charts etc. on oil make a lot of sense ........... Not that my opinion carries much weight !!, but I agree that the price of oil looks like it maybe bottoming (is that a real word??) Perhaps from a laymans point of view, I could make the comment that, the average man in the street, believes that it is only a matter of time before oil/price of fuel rises again (and probably substantially) so to be bearish on oil would be risky at the best of times in this modern age (??), so your analysis which shows us that it is becoming a risky proposition now (even after a sustained downturn), seems like good "advice" to me .......... I for one would not be game to back against oil rising over the short/medium term .............

Now, to a different slant ......... In keeping with my "lay my cards on the table" style of investing ........... I have short sold Amcor AMC atm (OK I know it was an up day and the market is trending upwards ............ call me stupid, I probably deserve it) but I still think this company has short term problems which can be seen in the charts as well .... four down days in succession (not today though) The moving averages are turning against the general market trend. ROC longer trend is diverging from price as is Momentum (not that I place a lot of importance on that, its just that it confirms my "wider" conception of what is happening ............ So I put myself up for judgement yet again in the hope I might learn something (Please be gentle on me cause I'm getting bruised Cheers Barney.

Hello barney,


How is the music business treating you?

I didn’t really want to respond to an actual trade you are in since this could affect your trade. Also, I really don’t want to be in any kind of position where I may be misconstrued as giving financial advice.

Firstly, I am not a fan of moving averages having discarded these a long time ago (although I do know of some cycle based displaced approaches which use measures of standard deviation which can be used effectively with EW styles). Try switching these off and just look at the bar chart and volume.

It's great that you're in a position, and that you pulled the trigger based on your analysis. I really don't want to colour your view, but will tell you a few things I notice, and make some suggestions that you may ponder if you like...

My eye is drawn immediately to the lower high a few days ago 4 days after the high. Also, my eye is drawn to the August low ranging to the October high. Also look at the minor high in August too. Consider where support may come from in the range. This will give you potential price objectives to consider.

When trading short, I’ve found that you really need to be nimble if you think these are short term counter trends and consider taking profits and re-entering on the way down, depending on how fast the move is, and what the price action is telling you.

In this case, the time to short was actually at close the day after the lower high.

There is some risk around 6.85 where the previous high was. This might be tested, but you’d expect some support to be evident around this area.

Also, if you consider patterns, you may find that you get “two thrusts” down to wash out the sellers, and then a resumption if this is actually a counter trend to the bullish drive. If it is a bearish drive, you can expect 5, 7, 9, or even 11 waves down… (or ask an EW specialist like wavepicker to correctly label the waves).

The question is barney, have you got a time frame in mind for this trade? What are the conditions under which you will take profits/losses? Do you have a profit target? Do you have a failure criteria? Do you have a criteria for taking partial profits, or adding to the position? This is of course based on a style, and maybe you have a moving average cross over to buy the short back?…



Regards


Magdoran

 

[barney]

Hello barney,


How is the music business treating you?

I didn’t really want to respond to an actual trade you are in since this could affect your trade. Also, I really don’t want to be in any kind of position where I may be misconstrued as giving financial advice.

Firstly, I am not a fan of moving averages having discarded these a long time ago (although I do know of some cycle based displaced approaches which use measures of standard deviation which can be used effectively with EW styles). Try switching these off and just look at the bar chart and volume.

It's great that you're in a position, and that you pulled the trigger based on your analysis. I really don't want to colour your view, but will tell you a few things I notice, and make some suggestions that you may ponder if you like...

My eye is drawn immediately to the lower high a few days ago 4 days after the high. Also, my eye is drawn to the August low ranging to the October high. Also look at the minor high in August too. Consider where support may come from in the range. This will give you potential price objectives to consider.

When trading short, I’ve found that you really need to be nimble if you think these are short term counter trends and consider taking profits and re-entering on the way down, depending on how fast the move is, and what the price action is telling you.

In this case, the time to short was actually at close the day after the lower high.

There is some risk around 6.85 where the previous high was. This might be tested, but you’d expect some support to be evident around this area.

Also, if you consider patterns, you may find that you get “two thrusts” down to wash out the sellers, and then a resumption if this is actually a counter trend to the bullish drive. If it is a bearish drive, you can expect 5, 7, 9, or even 11 waves down… (or ask an EW specialist like wavepicker to correctly label the waves).

The question is barney, have you got a time frame in mind for this trade? What are the conditions under which you will take profits/losses? Do you have a profit target? Do you have a failure criteria? Do you have a criteria for taking partial profits, or adding to the position? This is of course based on a style, and maybe you have a moving average cross over to buy the short back?…



Regards


Magdoran

Hi Mag, Music is going OK. Few weddings atm, Keeping the wolf from the door.

PS I am no longer holding this position. Not that I didn't like it, but I needed the money for other things (Its a bugga being poor)

Thanks for your input. I appreciate your position of not wishing to appear to be giving specific advice. No problems there. I've posted the chart below illustrating the "questions" you put to me, and hopefully I've gotten the positions correct. Let me know where I can improve.

Re the short sell point ..... Is this a general signal for a possible short position? The lower highs and lower lows with volume sell off etc. I assume all stocks will trend differently. This one seems to follow a "predictable" pattern if there is such a thing.

PPS I took the MA's etc off the chart. It does clear the picture up a bit, but I think I still need the visual confirmation that they give at this stage cause its not that obvious to me yet ........... Give me another 5 years Cheers Barney.

PPPS I am curious about the 5 7 9 or 11 waves theory. Are you saying that if the downturn turns out to be a "fair dinkum" bearish reversal,that it is possible to "predict" how far it may go? Is this based on mathematics, or human phsychology? Thanks.

PPPPS (More peas than you can poke a farmer at!) How do I stop my charts from being so messy looking when I upload them. I cant seem to reposition my captions anywhere other than the top of the page which gets really congested

 

[It's Snake Pliskin]

Re the short sell point ..... Is this a general signal for a possible short position? The lower highs and lower lows with volume sell off etc. I assume all stocks will trend differently. This one seems to follow a "predictable" pattern if there is such a thing.

PPPPS (More peas than you can poke a farmer at!) How do I stop my charts from being so messy looking when I upload them. I cant seem to reposition my captions anywhere other than the top of the page which gets really congested

Firstly Barney, Incredible charts don't have a good caption or comment facility. As I have trialled them I won't be paying and will just keep using the free version for backup etc.

I've posted a short sell hindsight analysis for you. Just to cover my **** for the vulchers willing to attack. :sheep: Predictable patterns are the stuff of Star Trek and Religious fanatics .

Actually I haven't because I can't remember how to compress it. Computers the stuff of miracles Life sure is harder with them.

Just did it but it looks **** so won't bother with it anymore. They look far better as a full screen. I'll post smilies instead Barney.

 

[barney]

Anyone care to analyse these from a technical point of view?

BPT
MLS
SDL
CBH

Hi there Can,

This wont be real technical, but if I start it off, someone else can fix it up then we all learn something

Re the SDL chart ..... Trend seems to be Long term up Medium term down Short term spike but direction uncertain ......
Broke through a resistance point of .095 on 26th October but did not sustain the break. The daily trend now seems downward considering increase in volume over last 2 days. Looks like the sp might continue to range between .095 and .085 in the short term depending on any news of course.

Thats my simple chart analysis. Hopefully someone will elaborate with more details ........... Cheers, Barney.

 

[barney]

Firstly Barney, Incredible charts don't have a good caption or comment facility. As I have trialled them I won't be paying and will just keep using the free version for backup etc.

I've posted a short sell hindsight analysis for you. Just to cover my **** for the vulchers willing to attack. :sheep: Predictable patterns are the stuff of Star Trek and Religious fanatics .

Actually I haven't because I can't remember how to compress it. Computers the stuff of miracles Life sure is harder with them.

I like the dancing sheep anyway thanks Snake Barney.

 

[wayneL]

Ongoing Crude Oil Example


Light Crude moved strongly down on the 30th in the US, in what appears to be an exhaustive bar.

If the time cycle is correct, this may become a low (or the next day). This was the significant day previously posted.

Obviously the pattern is either going to resolve down for another leg down, or resolve up for a drive up from this point. The trick is to recognise as early as possible which way. It is of course possible that crude will trade sideways for a while too and either accumulate or distribute…

The congestion indicates to me some kind indecision. This is probably partly due to the oncoming winter in the northern hemisphere, and the consequent increase in energy needs. The ongoing higher inventory levels in fuel and oil and the recent media hype over OPEC’s comments to cut production appear to me to be a lot of theatre.

I suspect we may see a strong move come from this soon. If this low can hold, this could be bullish depending how crude trades over the next few days. A close below the existing major low may signal bearish probabilities.


Regards


Magdoran

Mag,

What contract are you using there. My spot contract (z) looks quite different to yours.

 

[wayneL]

Oops....chart\/