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The chase is back on. This is the third weak Monday in a row, but remember last Tuesday we saw the tape run up, so keep that in mind. Today was the first day since November 4, 2009 the Dow closed under 10K, so that's quite a change. Below you'll find charts from both Osi and Zig, and DDT has a video on the way too, so be on the lookout for that. I'll go over charts later on to check gaps/resistance/support and share them in the posts. What a great job by everyone today! If you don't think team work brings good results, then you haven't been hanging around TTW long enough, but we hope you will. Please use caution if you're trying to trade any bounces, I tried that stunt last week if you'll all remember, and it wasn't my most stellar trading move. If perchance we make a second approach tomorrow at the 200 EMA, pay close attention to the volume and your candles, this would be knock #2. Thank you as always, Osi and Zig for your charts!
Osi’s Charts
Zig’s T-theory Charts
FX Traders: this song brought me very good luck today, so hopefully it will serve you well tonight. Welcome back to Fujisan too.. she’s an FX trader extraordinaire! Go get ‘em FX team!
What happened to better than expected and green shoots?
TTW traders have navigated through the fire very well this week, so congrats to this entire group! Let's stay steady and careful though... all hands on deck, all eyes on the charts. Even with yesterday's mega tank, BDI and Copper both finished in the green, and they were hinting of the downtrend only three days ago before we got our mini-meltdown. We are also approaching levels of support on NYSI that you'll see below, so some sideways action would not be surprising, but that neckline is looking very pretty on that chart right now. I have marked the target zone should it break and complete the pattern. Keep a close eye on resistance above if you're looking for a spot to get short, but make sure you have another eye on volume in those zones, and observe those candles.. there’s a lot of psychology they’ll provide to you. Have a very good weekend... this was an amazing week where we were able to witness the power of collaboration in a strong group of traders. My thanks to every one of you- we've all benefited from you efforts! If you have time today or over the weekend, be sure to read the article on your right side navigation zone by Ambrose Evans-Pritchard. Since I’m going to be stuck again indoors from this latest snow storm, I’ll be working on a pile of charts for individual stocks and will post as the weekend progresses, and hope if you have time you’ll share what’s on your radar as well. Trade well this afternoon! Edit to add: if you're going to attempt counter-trend trading, please be cautious.. the trend has changed and this is a very fragile market. If you have to sit it out and wait for a spot to short from, do so.
This is my chart on EUR/USD. I noticed someone shared an EW chart from M-ville yesterday, but my target is a wee bit lower, based on this long term bear flag pattern on the monthly chart. Ambitious, yes. Let’s see how this unfolds.
Zig’s chart, and he has a projected possible turn time coming up at 2:00 PM EST today.
Osi’s Chart for Friday
Oh yes we did! And if some people did not like the look of her or how she behaved before she gave up completely – that is their loss and our gain.
Feels damn good! Thou I have to admit that I abandoned “nailing” a little prematurely (getting old I suppose), but I definitely enjoyed watching my friends continue to nail her. Good job guys! True fighters who is not afraid to nail w5 all the way down to the floor!
Lets talk a little history.
Today, instead of usual pumping my horn I’d like to start from reminding the quick post of our newly found DeMark-ian compadre Wallfly.
On January 29th in the Disqus comments he wrote (his chart follows)
Here's an update on that D-Wave thing I got myself into. It should be coming to an end soon, most likely Monday, then we can expect a retrace of some sort. The chart is pretty much self-explanatory so I suspect anyone can read and understand it. Anyway, enjoy your weekend. :))
To fully appreciate that work of art you need to understand that even if fly has 6 hands (I have never been good in biology, I don’t even know if is is zoology I am talking about) it takes a lot of efforts, precision, concentration to count D-Wave by hands and do it for multiple timeframes. Please, read annotations on the chart – you will learn a lot.
Below is my current as of right now chart with materialized wave 5 down on 15 min chart, the one that we nailed.
[while was in the process of making this “in the rush” video – realized that I am not making my point…too late to redo – one vague video coming right up]
This post is about one of the most important, but often overlooked rule, having huge philological impact on trader's course of actions and decision making process.
Never confuse "Making money for the sake of fulfilling material desires" with "Making money as having profit on a trade".
We do trade for achieving material independence, when we place the trade we need to think PROFIT, NOT "I need to make $50K to buy new car". Setting material goal as a trade objective is dangerous, it clouds our judgment, messing up initial trade setup and timing and interfere with "close position" decision. What if we are not going to make $50K on a trade or "within a month"? Are we going to hold position forever if we only making $48K? Are we going to quadruple the size of position to achieve "$50K objective" sooner? Remember "counting turkeys" story? Are we going to trade even if market is bad and timing is wrong? I doubt that many of us will answer "yes" to any of these questions.
So here comes the rule: Trade for profit - you'll decide how to spend it AFTER you'll make it.
P.S. Next stop 1047? It feels good to be a banksta!
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Over the period of many years of making mistakes also known as discretionary trading I’ve heard one too many times the very same basic motif:
“Damn, that loss hurts big time”, “I did cut my loss at the predetermined stop, but it stinks”, “I don’t know if I can take any more losses like this one”… you are getting the point – are you?
It is not enough to have “stop loss rule”, not enough to be disciplined enough to honor it – what really is no less important is to be OK with the AMOUNT of loss/drawdown you are taking, you want not only “not to go broke”, but you want to sleep well knowing that you don’t have your entire stake at risk or any part of your stake betting which will make you uneasy.
Get into your comfort zone with the size of your position, limit maximum realistically possible loss on ANY single position to, let say 2% of entire portfolio value and don’t have too many positions at once and when you do – limit total risk exposure with automatic “cut off” amount of , let say, 5% on entire portfolio. (ALL positions losses combined)
Get comfortable….
There's my Grammy taking her break before she shorts the devil out of this tape some more. (okay, so it's not really her, but you can bet she'd serve a good short wallop when she's done smoking that stogie.) TTWrs fully expected this bounce today, and the question now is: how high will it bounce this week. Well, no one knows for certain, we'll take it one session at a time and keep an eye on resistance levels and counts on the various sectors, commodities and currency pairs we watch. Our friend and fellow trader, Wallfly had this to say at the closing, "Yup, wave 4 confirmed on the 30 at the close." Wallfly, I'd like you to know how lucky we are to have you trading alongside of us, by the way. Your work is very much appreciated. Moving on to the bigger picture it's important that we keep our eyes on the longer term charts, and the weekly charts in particular are still pointing to an IT downtrend, as well as many bearish configurations of the EMAs on daily charts now. Keeping that in mind, if you're counter-trend trading this week, please be careful not only in what you're trading, but where your targets are and what kind of exit plan you have in place should the wheels come off the bus quickly again. Stops are your friend on a wave 4. I am only looking at indicators in broad terms, if at all right now because as we learned during the Spring/Summer, we can remain oversold for a very long time and indicators can become a mirage to create bull traps. (goes both ways, of course) Use some patience and finesse above all things. Our DM counts remain on a sell set up for the monthly and weekly charts. All in all, I look forward to this week as I believe it only serves to create some lovely bearish patterns across the spectrum for us to trade. To top it off, some of us are watching certain cycle factors that should be coming together as the week continues. Overall, the bear is just taking a break to smoke a cigar. If you're not feeling risky, now is the time to set up your charts and mark your entries/exits. A good trader doesn't have to chase, he/she only reacts like a ninja at the planned point of execution. One other quick request: as the week progresses, and if you have time to spare, let's all hunt down the best possible ways of deploying our trading cash. In other words, the best/cleanest DM counts, good/clear patterns and so forth, on stocks that are either on Osi's DM list at the bottom and/or have good liquidity for our options traders, as well as decent ATR. As I find things I'll be sharing charts in the regular posting section too. TIA. On the economic calendar tomorrow: before the bell- Motor Vehicle Sales, ICSC-Goldman Store Sales and the Redbook. At 10:00 Turbo Timmy will flap his jaws, and also at 10:00 AM, Paul Volcker will be speaking. Additionally at 10:00 will be Pending Home Sales, so that Ten o'clock hour should be a busy one. Earnings tomorrow include: before the bell - ADM, BP, COCO, DOW, KFT, PCX, UPS, WHR. Post session earnings will include: AFL, EXM, MTW, MEE, VRSN, NETL. Also keep in mind CSCO will report after the bell on Wednesday.
The DDT Chart
Okay, FX team.. we're handing it over to you now. Shake 'em up tonight!
Thank you DDT for bringing us on board with DeMark these past months!
SPX Weekly DeMark Sell Signal.. look where we are now..
Have a great weekend, traders! Rest up, plan your trades for next week, and we’ll all catch up on Sunday! Thanks to everyone, and big welcomes to some old faces that found our little hideout this week, and all of the new contributors as well! Remember the first time we played this tune on TTW? :-) It took us awhile, but we’ve finally arrived!
“ Remember: if Friday’s lows are lower than Thursdays lows....next week ..lower lows in at least some (one) Index.....of the Major ones.....”
Who said that last Friday? It was Osso! Guess what, the statement stands true for next week too…. Congrats Osso on your call!
$SPX Analysis January 28th, ‘10 (VIDEO)
... and you just know they had to put up that sign due to multiple attempts to feed the crocs! “Intuition is a combination of historical (empirical) data, deep and heightened observation, and an ability to cut through the thickness of surface reality. Intuition is like a slow motion machine that captures data instantaneously and hits you like a ton of bricks." - Arbella Arthur. I had an epiphany today, after I took a few dozen bricks hit in the head. In a message to my trading Svengali, I realized I have waited nine long, teeth gnashing months to short this tape. Now all of a sudden I think it's time to get cute and buy the dips? A little late to that party, no? My point is to share what I'm trying to retrain my trading brain to do, right here, right now, and make it public in case anyone else is dealing with this too. Yes, there will be bounces, but the nature of this tape, the nature of the way they're delivering earnings (and most often now selling them off,) and other financial news has taken on a new bent. When Steve Lies-man is negative on his hero Benny, it's time to turn off the TV and trade the charts. They're telling us something already, in fact, they're yelling at us! Even on a retrace we could be looking at the bear patterns of the decade going on. The tape will let us know. Okay, so that's my little rant for the day and I'm ranting at myself, you're having to listen, sorry about that, but this is my trading family and we share and bare it all around here. :-) We'll continue to swing trade intra-day of course, it's what we do, but earth to TTWrs, watch your back and watch your money, this is a slippery slope, where patience reigns supreme, and a little touch of intuition never hurt anybody. Much the way they ran this tape up, they'll do the same thing on the way down. The floor arrives when THEY decide it arrives, and it will go much further than we think sanity might allow. (just like the bear rally – will we ever forget?) Tomorrow's economic news includes: GDP at 8:30 AM, Chicago PMI at 9:45 and Consumer Sentiment at 9:55. Earnings include: ACI, CVX, FO and HON. Looking ahead to Monday will be: XOM, HUM and SOHU. For a full list click here.
For you Zig Zag addicts- here’s the most recent look at what he’s watching for the days ahead on the T chart. Note, this does not include today’s price action,
but the time factor is still in play.
For EWrs, stop by Alpha’s blog for some great charts tonight, (but make sure you come back or I’ll send a posse out to find you.) Thanks for sharing, A! Below is another chart he generously shares with us here on TTW.
FX traders: I was thinking last night that a good way to kick off learning about FX might be to do some Q/A we can publish here on TTW? If you’d be willing to pitch in on that effort, let me know and we’ll do it via e-mail.
Make sure to get some rest tonight, fellow traders, and we’ll see you all later! FX Crazies - your mission is at hand! G/L tonight and don’t get too crazy! (like me)
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