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March
20, 2005 Commentary (weekend edition)-
Today I'm
going to quickly cover one item of business, and then we'll look at some
charts. I recently discovered an issue on the website where a security
certificate warning was erroneously popping up when one went to make a purchase
using any of the PayPal buttons. I explained this in detail in the recently
updated What's New
section, and how I got that corrected. Please check that out, especially if you
went to make a purchase and got 'scared away' because of the security
certificate warning. Everything is working smoothly now.
I had a tough
time deciding what to show today. I was originally thinking I was going to
follow up on BRCD, which has been following my script to the letter. The
pattern I hinted at caused a reaction, and not only that, pretty much the
reaction I expected. It then went about exactly as far up as I expected, and
rolled right at my area, and triggered a great short opportunity.
See if you
can do a workup on this one and figure out what I have been watching. This
stock is truly amazing and one of the most harmonic issues I have ever seen.
Perhaps next weekend I'll detail all this. In the meantime, see what you can
come up with to compare with what I will present.
Instead of BRCD I decided to show
one in the ES that I posted to the members' section this week.
It is just chock full with my thoughts and assessments, and shows how I use
some things in addition to the usual Fibonacci groupings and patterns to seek
out the synergies I want for my trading. The nice thing about the members'
section is that I can post things like this as they unfold, if I choose to. The
quotes show the text I lifted from that section. Note that // is shorthand for
'parallel'.
"Today I'm going to show some of the factors I have been watching
in the ES on the timeframes on the upper end of the intraday region, around the
60 and 13-minute areas. I'm going to show how these may influence my potential
trade premise formation. In other words, what I am weighing in when I start to
formulate some potential trade ideas. These tactics apply to any timeframe and
any liquid trading issue, as far my experience goes. Try to focus on what I'm
thinking, and not on the fact that it's not the issue or timeframe you work
with.
Let's start out with a 60-minute chart, with just a few things I am
looking at.


I am watching what this parallel line set
shows me (as I said, this will duplicate the modified Schiff ML set, which I
can't do with this charting program). I also added as best as I could a median
line. Notice how one choice for an ABCD hits that lower line (also, the black
lines for highlighting the ABCD do not have any technical significance, even
though the last bar I showed just happens to be right on the line).
You can see how this can guide my
thinking. Let's move forward a bit and see what happened from here. I will add
something else in that will set up my main point for the day.


The ES hit the line, bounced, rolled over,
hit the line again and reversed right up. I looked to see what retracement hit
that median line, and saw it was the .300. The ES promptly went right up to
that. Let's move down to the 13-minute chart and see what we see there.


Take a look at that additional line I added
in. It intersects the ML and .300 retracement in one spot. But there's more.
Look at the structure of the move into this area. That's as clear of a 5 wave
as I have seen. Let's drop down to a 3-minute and look at some more
detail.


Look at the clear 5 wave into the area, and
how another ML set guided me. Notice that a nice looking ABCD (the wave 4)
dropped below the ML lower //. This set up a thrust up to not only the
intersection of the two other lines and the .300 retracement, but the lower ML
// for this set, and this last set was quite 'proven' to me by them.
Can you see
my thinking and what I'm watching here? I haven't even done the full fib workup
or anything here for you. I'm just showing you what is right there, and what
shapes my thinking to some extent. I must work this into my premise, as it's
just too much to ignore. Let's see what happened from here.


Well, it didn't really surprise me to any
great extent when this rolled over dead bang right at that spot. Now look at
the run down. Just look at that ABCD about half-way down. Add-on spot for me?
Open another trade? Scale out and re-add-on? Then what happened? Look at the
ABCD that formed, with an ABCD in the BC leg. Is that crazy, or what?
Now where is
it? What do you see here? There is just one setup and pattern after another.
This never seems to end. I just sit around and wait for things to come
together, and they do. I am only interested in trading when I have a setup. "I
never try to predict the market, I just look for setups." And there are
endless setups."
It's really amazing how all this comes together and how
clear it can be at times for me. I am able to find things like this across the
board on all timeframes and all issues. I am watching stocks, FX, commodities,
minis, on everything from tick charts to monthly charts. I find the methodology
applies for my trading in any liquid market.
I detail all this in the books, except the median line work I
am doing. I definitely have enough material to write a book on how I use those
with my 'usual' methodology, but as I have said many times, I hung up my pen
for now, so I'm just not going to write another book at this time. Plus, I just
don't have the time, even if I wanted to. But I do have some unique insights,
and it sure would be a cool book
The next commentary will be the next
weekend's edition, posted by Sunday evening March 27, 2005. I will likely do
the BRCD follow up, unless something better comes along.
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