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 March 6,
2005 Commentary (weekend edition)-
Before I even
begin today's commentary I want to say that this has been the best trading
lately I have seen in as long as I can remember. I just can't believe how many
opportunities I have been getting, and how clear they have been. On the
15-minute and 60-minute timeframes I literally couldn't even count how many
setups I've been seeing lately. I don't care too much what happens, as long as
there is movement.
Remember that 'chop' or swinging up and down on one
timeframe may be full of wonderful trends and setups on another timeframe. If
you aren't seeing the market as just loaded with setups in the last few months
then maybe you should pore back over that extensive free archive of past
commentaries and make some decisions for yourself. My market cup runneth over
as far as setups. Well, that's my opinion for the day, and I wanted to share
it. Let's move on to some charts.
It was tough for me to even choose what to
show here, since I have such an enormous group of things to choose from. I feel
that I can't post but a small part of the entirety of what I see in the members' section, and what I
post is huge (too much!). This week I posted 25 charts, and the commentary to
go with them. The week before it was 29 charts. Now to pick one or two
abbreviated sequences for in here, well, that's tricky. But, here goes.
I'll start
with EXC. I had been watching this one for a long opportunity for a while, and
discussing it in the in the members' commentary. Let's look at the setup I was
watching, and what happened.
The lower setup was the initial potential
trade area and setup that I was watching. An ABCD formed off the 5-point
pattern, and came right down to the B point area. There were a few lines coming
together at that point with my very tight grouping.
I had a
larger overall premise and 'context' in here, though, and it has to do with my
studies of the 5-point patterns. Much of this is explained in Kane Trading on: A Totally New 5-Point
Pattern, as well as the initial background information that is laid out
in Kane Trading on: Multiple
Timeframes and 'Context'. This is a commonly discussed topic in the
members' area, as it is one of my most current and cutting edge areas of study
right now.
Not only did EXC rocket off my grouping (with an
excellent trigger using that new variation of the Pattern Trade Entry Technique I
mentioned before), after a nice thrust it pulled back into that new ABCD
pattern variation I also mentioned that I have been showing to my new students.
I highlighted the pattern with the arrow. (I know I am referring to some
variations that aren't available 'for free' (or even in the books), but I am
working very hard over here and discovering additional new things that I think
are very useful, and there is a limit to how much I can just broadcast all this
to the entire planet for free. I'd like to, but I don't want to 'cut my own
throat', too.)
EXC gave me the opportunity to add on here, or open a new position
if I had scaled out of the entire position off the lower grouping. This one has
just been forming one harmonic setup after another, like many of the things I
am watching. Just look at the chart. I can't ask for more than that.
Let's look at
the BKX on a 15-minute chart. Recall the BKX has recently come off that awesome
large ABCD pattern that I pointed out in advance in the members' section. I
will show this sequence without moving the chart position.
The BKX started to pull back, and I set up
two groupings down below. Since the groupings were below the median line lower
parallel I had, I looked for some other lines. I did have some areas to watch
closer to the median line parallel, but I can't show everything here. As you
should know by now, I'm watching for reactions to my potential areas, and I may
have several spots to watch.
The black line is an uptrend line, and the red line is
something curious I added 'for fun'. I did a regression line for the run up and
cloned that and keyed it off that key swing-low. This told me the average slope
of the move so far. Let's see what happened.
And another nice reaction to one of my
'action spots'. I can use this to play individual stocks in the sector, or with
many of these sector plays I can go right to HOLDRS or ETF's. But it gets
better from here. Keep in mind, too, many of these I am posting ahead of
time in the members' area. These aren't all 'after the fact' examples that
happened to work out.
The BKX then rolled over after a nice
potential trade opportunity and formed an ABCD and 5-point pattern, right at
the lower grouping. I didn't highlight the pattern, but it should jump right
off the chart at you. I normally wouldn't use the old groupings after the
reaction, but form new groupings for the new pattern. In this case one grouping
fell right on this spot.
I left the old grouping to show something here. The BKX
started to react to the new setup and new grouping, which overlapped the old
lower grouping. Game on, again. Let's see what happened from there.
Now, that's not too bad for my trading. Look
at how it rolled over a bit at a downtrend line (not shown) off the A and C
points after forming a small ABCD pattern. Would you have closed if you were
in? What was the premise and 'context' for the trade? The gap the next day,
right to that spot, was fully expected. Perhaps I scaled a bit, but the premise
wouldn't have had the trade closed by any stretch. Anyone who has read Kane Trading on: Trade Management
would have a good idea what my plan was. This one was a smoker, and is still in
play.
As you can see, potential opportunities abound for me, and my
methodology. I have shown just two issues here. I am seeing this type of action
all across the board. One setup after another. I hope everyone is seeing
similar things and finding areas to work up some trade premises. This seems to
be a particularly great time for harmonic setups, although I have to admit it
may just be that I am getting better and better at spotting things. Regardless,
I am very impressed with the potential right now for my methodology.
The next
commentary will be sometime around next weekend, but I can't say for sure
exactly when. I am working with a student for the entire weekend, and that will
alter my normal schedule a bit. I may try to post it by Friday, but I'll have a
lot to do already. If not, it may not be until Monday. Keep trying back, as
I'll get to it at some point, as soon as I can.
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