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The setup for the big trade

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Wed, Oct 4, 2017 - 11:47am
Pete
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Dec Gold 60m

I wanted to go back and review the bottoming formation on the 60m chart.

As price descended toward the daily target lines ML and R1, price was not making the ml from pw (off chart). Previously, price failed to reach the ml from pv at pivot y. So a shakeout pattern was present. We can also say there was ml divergence happening as price declined toward the low.

Now, price not making the ml at the possible pz is a sign of trend weakness and imminent trend change.

How/when could this ml failure at pz be signaled? When price closes the hour above the sh, should there be one, to the mlh from py. I'm still looking at which sh is more reliable or safe to use if there is more than one. In this case, there are two that can be considered. The earlier close over sh1 did in fact signal the low at pz (price didn't go lower), and the later close over sh2 came after a reversal bar off the new hourly mlh. (Notice the price pop after this reversal bar.) Either way, the indication of the "close over the sh" signaled that pz was in.

I notice that the close over sh1 was confirmed by the (still experimental) rsi momentum oscillator (note the vertical green line on the oscillator at that bar). 

I suppose one could have bought the market/covered all shorts/reversed at that first point. Or, even bought at the new possible 60m mlh, given the (first) close over sh1, when price came back to it. A suitable stop would have been a tick under pz for that entry attempt.

The 2nd H-bounce entry tech indicated a buy at the circled close (2hb buy). The initial stop (ist) is a tick under the first H-bounce low (red line). After the move progresses, the stop can be raised to under the 2hb buy bar. Some experiences suggest a close under this bar is more robust, but it hasn't been researched too deeply. If you try the close, remember to keep the OCO stop of a tick under the 1st low.

Price usually makes the ml from px in this pattern. Since profits must be taken in order to be a consistent winner (per Mark Douglas), this ml is not a bad choice of target line for this purpose. The partial profit (pp) sell would have made you 80.2 - 72.8 = 7.4 pts/ct.

This morning price has declined sharply from a mildly overbought RSI and challenged the new possible daily MLH value of "1273.05" (from the spreadsheet) = 1273.1 (rounded). The decline so far has reached that value exactly. There is a long tail on the last bar as I send, but it is not a reversal bar. Expect more pressure to the downside until the MLH challenge is resolved one way or the other. And I hate to say it, but sometimes the possible 2P line, lower than the MLH, turns out to be the true support angle. As if this weren't complex enough!

Anything can happen in the market. Even a drop to the yet-unmade ML at 1270.1, or lower (to .618R on the daily?), and THEN the true low made--or not! With the tech presented here, you are points ahead, with a no-loss long position for a possible major pivot low. I didn't mention it earlier, but there is an awi indication on the daily chart up at the last m0 pivot high, basis m0, at 1317.1. That value is a possible initial target for a rally per the zoom rule. Given that fact, you can see why you want to stay long as long as possible from a 1272.8 entry.

Wed, Oct 4, 2017 - 11:54pm
Pete
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DX update

Doesn't look like DX has much further upside at this time--unless there is some remarkable breakthrough. Implications for gold? Gold made its top as DX made its bottom (9/8)...

Thu, Oct 5, 2017 - 9:50am
Pete
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DX and Gold

9:45 ET---DX has rallied into resistance area, and for some reason (?) gold has dropped as if to complete an abc correction to the rally from 1271. The possible 2P line comes in today at 1273, the same value (almost) as yesterday's low at 1273.1. This may provide critical support for an abc correction, with gold to rally then higher.

Thu, Oct 5, 2017 - 10:34am
Pete
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ES FYI

I don't understand some of the parallel lines drawn by various commentators, including Trader Joe this time. ES shows the upper parallel to 0-2 to hit about 2546 today...

Gold appears to be going nowhere this morning, perhaps waiting for the BLS release tomorrow morning. The rally after the sudden drop yesterday does not look impulsive, so probably a b wave, as we await culmination of a c wave in the abc. This bears watching. Or maybe we get an impulse to new lows? Don't forget the old ML (not reached), today at 1269.70 (tomorrow, 1269.30), and the .618R at 1268.90. That region may yet be the culmination of this major pivot low. We could easily see an intraday rebound from there, with no close under 1271 low. 

Thu, Oct 5, 2017 - 12:15pm
Pete
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an abc flat in gold?--60m chart

Per EWave, gold has just made a sufficient retracement--the minimum 90% of w.a down--for a valid w.c of an abc flat correction on the 60m chart. Price has touched the MLH value for today (1275.1), and not touched the 2P (1273.0) value. Additionally, the 60m chart R1 line just been reached for the first time. The daily chart R1 is above the market currently (1276.6), but this does not matter now. It is possible, therefore, that we get a reversal signal from this level of 1274.30.

Fri, Oct 6, 2017 - 1:51am
Pete
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from the "I wish I had seen that" department

Looking back over the price action for Thursday: Price initally rallied as anticipated (out of the 2hb pattern), but then moved sharply lower on high volume. What I didn't recognize is the pattern where price reaches wl#1 to the initial ml (and not much further) and then rallies back (often in multiple pivots) to the zoomed iml. This is quite typical behavior, actually, in a return to the main trend.

Being conditioned to see the 60m chart in terms of larger pivots made this tough to recognize, but I keep learning. What I am writing is all 20/20 hindsight. I was pretty asleep to the market as we had a family visit. Truth is, I didn't even notice the volume surge.

The reversal pattern from the top at 1285 could be called a ZZ--price zoomed up and then down. The ZZ can signal a long and strong wave if the next pivot does not take out the first Z extreme. Like most pattern setups, it works best in trading the end of a correction.

The possible major pivot turn at the daily r1 line has been negated with the EOD close below the extreme. (The remaining long position from before was stopped out.) The daily trend remains down.

Sat, Oct 7, 2017 - 3:13am
Pete
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the x-a line

A couple of years ago I was shown a line that sometimes works to pick the extreme of a correction. It wasn't given a name, but I call it the x-a line. The point of it is to mark the pivot c or pivot e low for a correction. Use it in conjunction with other factors of time, price, and pattern.

As Woody Allen said, "80% of success is showing up." I didn't show up for this bottom, so didn't get the worm. Price reached the x-a line at the low on Friday (see chart), with hourly RSI at ~20 (very oversold) at 10:00ET. Both the 5m and 15m charts showed confirmation of a low immediately after, with volume reversal at both time frames. The risk was very low on the 5m, and reasonable on the 15m. Of course price was below the Major ML and .618 level at the time, but by end of day it was quite clear that an important low is probably in place. Next task is to try to buy a pivot 2 in expectation of a third wave higher. 

Sat, Oct 7, 2017 - 3:58am
Pete
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Gold 60m

And there was this, a basic construction. Always good practice to draw the latest fork and also the one using the origin (the p0 of the formation). Surprising how often the fork using the origin works out.

When patterns from different time frames converge at a particular time/price point, you have something. Different levels of trend simultaneously complete their forms. Price action confirms and acts as the trade trigger.

Sat, Oct 7, 2017 - 7:40am
UncleFester
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Update

That old, sweet, little 1.62 fanline from the 12/2015 major low...let's see if it holds up.

 https://s.tradingview.com/x/UKyUawWq/

Just because I'm paranoid, doesn't mean they aren't out to get me.
Sat, Oct 7, 2017 - 11:01am
Sirtitan45
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If you toss every chart

If you toss every chart permutation out there and pat yourself on the back when one is right, you arent smart. You’re a jerk. If you are doing it to think out as much of the probability space as possible then thats cool. I respect that. 

Mon, Oct 9, 2017 - 8:13am
Pete
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FWIW in ES

Can price close back above the zoomed ml? Would this be the top of a small w.b?

Mon, Oct 9, 2017 - 8:54am
Pete
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GCZ7 am 60m

Price has powerfully zoomed the new upsloping m0 daily ml--a good confirmation of the Friday low--and moved well beyond the r1 line of the last 60m swing down (to the low). It has almost reached the new far h. I want to buy a pivot 2 on the 60m chart. If you look at prior major pivot highs and lows, oftentimes the MLH on the daily is not returned to for support. Price just runs.

Note that price had a sharper correction from near the far h, a probable zoom down on say the 15m chart. Price may well continue lower for most of the day.

As price often returns to the zoomed ml, where it finds support for a continued move higher, I am watching it. If it can't close back below it before turning up, it's pointing to a strong w.3 higher. The ? area is a potential bottom area as price often returns to the r1 line after breaking up through it. That's in the early AM on Tuesday. 

We are likely to see at least a minor daily pivot to the upside, and perhaps a major, in due course. The awi pivot high at 1317.1 is a target. 

(Edit: the daily chart value of the new, zoomed m0 ml is for Monday 1276.8)

Tue, Oct 10, 2017 - 9:41am
Pete
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a look back at silver

Dec Silver made its low in a 5x pattern. This pattern is quite rare and is useful in a correction only. The turn typically occurs within a day of the crossing of the far 2p line with the latest ml. Price usually overshoots. In this case, the 5m chart showed all the favorable indications for a turn, including rsi<20 and a "snap-back" type reversal pattern within five cents of the X value for the day. There was a .05 risk with that entry trigger.

Tue, Oct 10, 2017 - 12:24pm
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I've been off a few

I've been off a few days.

Thanks to all for your great posts !

G-V update: it's been real;ly high since September, as previously posted. There are still G-V peaks detectable during the current plateau of crazy skyhigh-ness for this forecast.

We dropped slightly during the last couple of days, but this (or yesterday) was a "low" and now it's going back up again, into notable levels from tomorrow 11th Oct highest 14th-15th Oct and winding back a bit after that. Geopolitical, politics (boardroom, societal) and also violent characteristics.

And after high V centred around 24th and a lesser high for both at end of month this super high G-V period will wane somewhat. Note that the global human spring has been wound tight for an extended period and that permits culmination type events, as in eg the final crisis deciding point of a protracted power contest to appear.

What this means for the price of gold, and the valuation of sovereign bonds is another matter, but I will expect the most interesting moments for both during the coming fortnight to fall at these times.

And there are stops for when it goes differently.

Will this October contain a surprise for stocks? This is a perpetual problem which has fermenting away for 8 years and 7 months. So it's overtime. But the game isn't over until the ref blows the whistle. I watch it carefully. So so carefully from now inwards. Every support level is an incremental stop trigger, until the 100th has been breached and going the other way becomes the game..

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, Oct 10, 2017 - 11:14pm
Pete
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Thanks AM

for the G-V update and your thoughts yes

Tue, Oct 10, 2017 - 11:45pm
Pete
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Dec Gold 60m Tuesday eve

Gold has rallied well over the daily m0 upper parallel (UH). This is the power zoom at a pivot 1.

The question arises, if one got long early in the move, what would be a good partial-profit taking strategy? I'd be taking a partial profit because I accept Mark Douglas' teaching. You must pay yourself as the market gives you money. Just when/how is a whole other matter.

I see the question as being, how do I know when risk is increasing for a sharp retracement? There is no one correct answer, but obviously one strategy would be to trail a stop for part of the position as price advances. In this instance, price sailed over the r1 line with almost no retracements at all, so risk of immediate sharp counter-move (downward) faded rapidly. One mechanical technique that works pretty well is to simply raise the stop to under the last m3 pivot low, because most daily m0 moves (which this sort of promised to be) have at least a pair of m3 60m pivots inside them, and more commonly two pairs. To let profits run, you can raise the stop to under the latest m3 pivot low.

Using this mechanical approach, you'd put a stop loss for part of the position under 2 as soon as enough time elapsed toward 3. Then you'd raise it to under 4 as soon as enough time again elapsed--or sooner if there were other concerns. In the current market, you'd raise it under pivot a as soon as the rise toward pivot b went into the 4th hourly bar. You would have been stopped out this last hour.

Your strategy might have changed as soon as you saw that pivot a was a downward zoom of the m3 ml from p3. This is our warning that maybe a top (m0 daily, probably) is in, given that we have 5 m3 60m pivots up, so maybe you took your partial profit as soon as a pivot b were possible! Pivot b didn't come close to either of the new possible mlh's drawn, so somebody was eager to sell--either to nail down profits, or to start a corrective wave in the lower-volume environment of evening trading. If you study the 5m chart of the a-b rally (remembering the 60m zoom down a few hours earlier), you'll see some reasons why the selling started, and why you might have acted to sell too. This was for taking a partial profit, not taking a short position against the trend (although very active traders might want to do that).

Should the move continue, I've drawn the new channel downward. There isn't an initial ml that can be drawn with pivots from the rally, so we use pa and pb to get a sense of where/how it might go.

Strong support (and a great buy point) would be at 1279.70, the daily chart ml value of the new upward m0 fork for Wednesday. This value equals the 50%R value of the rally. The larger external retracements of the small a-b wave closely coincide with the 38.2 and 50%R levels. If this presently small foray lower continues into a pullback to the daily m0 ML (my wish fulfilled), it could culminate somewhere near the iml or its parallels, sometime between the NY open around 8:20ET and its close at 17:00ET. We'll see what we get. Maybe it does only 38%--probably more likely. So we've got to be nimble.

All this thought is in preparation for what might be a buying opportunity, to get on what may continue to be a major swing higher--even to beyond 1362.40. 

Wed, Oct 11, 2017 - 1:05pm
Pete
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Dec gold 60m pre FOMC

Here's what I'm looking at on the 60m chart.

I added an additional line to the 60m chart (and removed the r lines as they are not useful at this point). The additional line is the red dotted one, which is the iml fork "translated" from the high reached so far. It marks the "ml to parallel" distance which can mark the extent of correction when price has zoomed the far h (power zoom). It's just another line to watch for confirmation. We might not get a retracement back to the daily iml at 1279.7 today, or 1281.2 next session.
Meanwhile, there are the Fib retracement levels, especially 38 and 50%, and the external retracements of the a-b wave.

Sharper moves that produce low rsi readings on retracements are actually surer to produce a low from which a strong rebound can follow, especially in a power zoom situation.

In the early stages of the July rally gold made two small m1 retracements on the daily chart that proved to be very good buying opportunities. Perhaps the same pattern is shaping up now? I haven't checked to see if one of those was a Fed day...

In those retracements, there was an inside day, followed by a small move lower that did not break the low of the prior strong up bar. Analogously, that would mean today is an inside day, and price retraces into Thursday's session without breaking below 1284.60. That low is circled in red. The Fed minutes are released at 2:00 ET today and who knows for sure what the price action will be.

Wed, Oct 11, 2017 - 6:29pm
Pete
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Post FOMC

Well, she went t'other way, which only points to this trader's fear of the FOMC days.

Price made a simple bullish flag, or in Andrews-speak, stopped at the far h of the modified Schiff ml. The 5m chart gave a simple continuation pattern entry to the upside for a bit more than a 1 pt risk, depending on slippage on the long fill, which can be substantial. Probably wise to use a stop limit buy order, which would have been filled in the second minute past 2pm ET, as price got very volatile and came back down, as is typical with the FOMC releases. You can see the 1m action at the cmegroup.com website.

Wed, Oct 11, 2017 - 8:03pm
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On the daily it's a pullback

On the daily it's a pullback to support.

Farther out it's a pullback to midrange with a possible interim low at midrange preparatory to the next swing (back to retest high or break midrange support).

But look at weekly. It failed to make a fresh high. (last high Jul 2016) So .... which is more likely? Have another go and let some losers out easy, or go to retest annual lows and squeeze them to puke their holdings at 2-3 year range bottom? I admit the possibility that bullishness can win. It's on the pivot for ages after all. (A bit under actually) But I'm not bullish unless or until it takes out the VAP resistance. 

The weekly bigger picture is not positive in my opinion. But a year to get to the weekly-monthly swing low seems a lot. Reasons for caution abound. Stops are our friend.

I'll update harmonic weekly tomorrow.

I see that palladium coins are selling out. Always they buy what's up. How about prospects for a Pall:Plat spread reversion to mean trade?

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, Oct 13, 2017 - 1:36am
Pete
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Dec Gold 60m Thursday

There was a gift this morning at the crossing of the two red mls on the 60m chart, and also the ml from p0. Price had (power) zoomed the far h from pb, and returned to the ml, where it found support. Lots of lines there.

The 5m chart shows the internal structure of the 7 hour decline--a nice 5 pivots, with an awi at the p4. On the 1m chart, you can see the perfect snap-back reversal after price made its low, good as a low-risk buy trigger.

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