February 20-22, 2004 Commentary
Today I'm going to start out by
discussing some decisions that I have made about the direction of the free
commentary, and the projects that I am going to work on next. These have been
difficult decisions for me to make. I tried to take into account the feedback
that I have gotten from readers and clients as I weighed my possible decisions.
The one thing I know is that I can't do it all.
It seems that the most important
thing to most of my readers right now is to get more information on my use of
context and timeframes. Now, with this mostly being a Fibonacci intensive
website, you would think the demands would be along those lines. But I've
presented a lot of material in that vein. My context and timeframe concepts are
quite new to most people, and the detailed writings from me in that direction
Given that, I've decided I need to get busy on getting something
written up in that area. Next, I had to decide how to do that. It seems to me
that it would be difficult to convey the full depth and intricacies of the
topics in small bits and pieces in the daily commentary, spread out over a long
time period. This need to be done like the rest of my material, either as a
book or as an article.
The amount of material that I have right now implies
either two articles or a book. Since I tie the context concept in very closely
with the timeframes concept, it leaned me towards a book. But this presents me
with a few dilemmas. First off, I'm still desperately trying to find the time
to finish up Kane Trading on: Trade
Management. And as I mentioned, my trading is starting to be affected
by the time commitment from this project.
So, in order to add to anything new
into the mix, I simply have to cut back from other areas. It is a tough
decision for me to make, but I feel that I have to use my time as best as I can
for the long-term benefit of my readers and clients. Hence, I have decided to
cut the free commentary back to twice per week, mid-week (Wednesday) and the
weekend (Sunday), and use the time to get started on a book on context and
I have a lot of notes and charts already pulled together in this
area, so this should not take me nearly as long as a book started from scratch.
It's mostly just layout, organization, proofreading, printing, etc. I will also
attempt to keep plugging away at Trade Management at the same time. I
can't even attempt to come up with a reasonable estimate as to when I may
finish these two books up, but I will try to keep everyone posted as I learn
I feel that the Kane Trading book series will be a lot more
complete once these two volumes are finished. That's not to say that I don't
have other worthwhile book topics that I feel should be written up, only that
the balance of the current series will be much better once these two are
finished. For these reasons I plan to try really hard to 'get on the stick' and
get these finished.
Once these two books are on the shelf I will reassess
the direction of the commentary. I know that cutting back on the commentary
will disappoint some people, but I based my decision heavily on reader input,
and getting the material out that will be in the next two books, in full
detail, was what seemed to be the most important to the people who e-mailed
The other suggestion that I received from quite a few readers was
the possibility of my starting some type of paid subscription service for those
that want more commentary, with possibly more detail. I'm not sure that I want
to go in that direction, but if that is something that is of interest to enough
people, I may give it some thought after I finish the two books. I would
welcome e-mails letting me know about possible interest in such a
Let me go over a couple more housekeeping details, and then we'll
review some charts. First, all good things have to come to an end at some
point, and hence the introductory free shipping special for book purchases will
conclude at the end of this month. If you have been thinking about buying some
books and have been postponing it, you might want to act now and take advantage
of the free shipping before it's too late.
Second, I will be revising the
layout of the mentorship program just a bit, offering two choices for the
program, 'standard' and 'intensive'. I expect to have the revised page up very
soon. I will try to post details on this type of stuff on the 'What's New' page, as soon as I
do any updates.
With that, let's take a look at some charts, which is why we are
all here anyways. I'll show something interesting from the 13-minute chart of
the ES. I was looking for a place for the ES to turn around from the selling,
and I was setting up various groupings for a possible trade. I spotted an
amazingly tight convergence. I'll lay this one out in a few steps. Let's look
at step one.
I put a 1.272 retracement and a 2.058
retracement on the chart, along with a 1.000 retracement from a previous
swing-low. The overlap was incredible. I then added a few more numbers onto the
chart. Let's see how they complemented the current numbers.
The grouping has a slew of numbers, all
within one tick. There were some other more standard technical analysis factors
lining up there, too. This was an area that I wanted to watch for a possible
bounce play. I wasn't looking to call the direction of the ES for very long,
just long enough for an intraday play. I dropped down to the 3-minute chart to
look for an entry trigger. Let's look at the ES action in the area of the
I placed horizontal lines on the chart to
show the bounds of the grouping. The ES hit the top of the one tick wide
grouping, and began to rise. Those readers familiar with Kane Trading on: Entry Techniques
can take one look at this chart and likely see several entry triggers, long
before the last expansion bar up. Let's see what kind of potential this trade
The ES really rocketed off the area of the
grouping. The reversal point also coincided with some 'positive talk' from a
major official on the television. It's amazing to me how often this type of
thing happens right at the area of a grouping or pattern completion. Given how
poorly I feel this intraday market has been lately, this was a pretty good
The next commentary will be the mid-week commentary on Wednesday.
In the meantime, I'll be working on the books as feverishly as I can.
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