Futures: Chart Patterns

[Atlatyl]

Thought it might be interesting to see what others are looking at, since we've hundreds of eyes on with hundreds of takes on hundreds of charts. Post what you see, or think is high probability...we'll see how it plays out
Here's one:
Rising Wedge in Nasdaq; I'm guessing a break around 1875, target 1800.
Consumer confidence tomorrow at 10:00 could kick it off. Unfilled Gap around 1815 is a magnet.
I'm short 87.25, stop 90.25.

[NarN]

Atlatyl

I like the way you are thinking. Pa based analysis, small stop, big target. That's my style as well.

A few remarks:

You are shorting a multiday (multiweek) uptrend! A wedge pattern is very common but it can remain inside (or spike above the wedge) without breaking the pattern. I advise you wait for more confirmation before shorting this. Like the inside UTL retest from below or horizontal sup/res flip.

My view:

We are in a weekly uptrend (from last year). We had a reaction (bullflag) and are now testing the top flag channel line (actually broke it: yellow channel in SS). There is another channel (purple) that's in tact and might work as a magnet (third touch inside channel DTL).

This area is great for initiating a short position. but either with a bigger stop (and smaller size or scale in) or wait for confirmation. Due to weekly uptrend pressure is up.

Red wedge is in tact but it's hard to predict how high it wants to go.

IMO this is a SOH area where a retest of support should be bought and a support failure (flip of support to resistance should be sold).

Just my $0.02.

http://www.sierrachart.com/userimage...ploadImage.png

[Atlatyl]

Great post Narn
you bring up two good points..backing up to a much bigger picture, and the importance of letting the market tip it's hand. The 'biggest' I went was seeing that we were at the .618 retracement of this June-July swing, and coming up to the high test on 6/23 of the break that began the down move...stop was over that. What should of kept me sitting on hands was the whole number test at 1900. Price is/was to close to not go there...or close. Realized that awaking at 2am...lol. Small hit, nbd. There are two perfect, low risk-high reward entries every day, my Achilles heel is remembering that there are also a dozen really nice ones during the day. Thanks for your $.02...one thing we know for sure...time will tell

[Atlatyl]

Wedge seems to be in play; target still that unfilled gap below....which happens to coincide with the Daily 200MA....how do they do that??

[Atlatyl]

Gonna modify today's target to 58 (S1 and a little above 127 fib extension of yesterdays range), unless we get over todays pivot, which means they'll make another attempt at today's high. 48.25 is the next big volume-by-price area below.

[Atlatyl]

Done for the day; more guesswork tomorrow

[NarN]

Nice trade! Don't get fooled by the downmove. Longer term is up.

[Atlatyl]

Got up early to get on before news and hopefully get some "cushion" to hold thru it. GDP at 8:30, Consumer Sentiment @ 9:55. We are within range of gap fill; I'm playing this descending triangle...should it fail, I'll try again at the dotted line...58.75

[Atlatyl]

Ok...so far so good...if we can hold a -15 gap down...odds are high it's a breakaway gap and won't be filled today...maybe give us a target for next week...or next month assuming we set up a big range between 1800-1900
If we can't hold -15 gap...we could set up a range between pre mkt lows and highs (24 hr chart)..which will include yesterdays close.

[Atlatyl]

Good for 15+ or so, but not the whole nine yards. Nice bounce to fill the gap. At the risk of being fixated on an idea, here's some reverse engineering: Take the length of yesterdays big down push, back it off proposed target, and you have a possible re-action high. Have to get below todays center, re-test of the lows for this to happen today....target is on the fringes of possible range...would take some emotion to get there. Or we can chop the rest of the day...it is the end of the month.

[Atlatyl]

Originally Posted by NarN

Nice trade! Don't get fooled by the downmove. Longer term is up.

I was thinking about you and the "bigger picture", and what I missed today....lol
...it's always something

[NarN]

Originally Posted by Atlatyl

Ok...so far so good...if we can hold a -15 gap down...odds are high it's a breakaway gap and won't be filled today...maybe give us a target for next week...or next month assuming we set up a big range between 1800-1900
If we can't hold -15 gap...we could set up a range between pre mkt lows and highs (24 hr chart)..which will include yesterdays close.

You value gaps a lot? I use them as for confirmation on targets but not to initiate trades. I never researched gaps so I don't have enough info on them to find them useful.

[NarN]

Originally Posted by Atlatyl

I was thinking about you and the "bigger picture", and what I missed today....lol
...it's always something

Bigger timeframes hold more power but it's hard to trade them due to bigger stops.

So I like to combine them where the bigger timeframe is used for specific 'areas' where reaction might occur. Once this area is reached I zoom in to a smaller timeframe to get a low risk entry.

[Atlatyl]

Originally Posted by NarN

You value gaps a lot? I use them as for confirmation on targets but not to initiate trades. I never researched gaps so I don't have enough info on them to find them useful.

ya...gaps make the world go 'round
Open flat...you generally have a bit of a chop fest, gap will give you immediate range and buy/sell pressure. Fading the gap off s/r or pivot levels leads to a gap fill more times than not...unless gap is > 15-20, especially with news...or over/under the previous day's hi/lo...then odds drop for a timely fill, and can be first signal of a possible trend day. If you do some stats on them, see how often they fill , how long it takes..and what kind of s/r turns them around...you'll find they're a decent trade, and often launch off strong in the direction opposite the gap.

[Atlatyl]

Well speaking of gaps last night, we wake up to a biggy as an illustration.
I don’t think today’s big gap will turn into a trend day simply because a trend day would have to go beyond last week’s high at 1900…and there is strong resistance there that goes way back. Resistance 86.5;I would be surprised to see that surpassed, this morning anyway. 85 is the 127 fib extension of Friday’s range…always good resistance, albeit possibly temporary. So I have a bias for either a gap fill around 65, or a partial gap fill depending on behavior at Friday’s high.

[NarN]

Good info about gaps, tnx for that.

I don't value a previous high as big resistance in an uptrend. It's an uptrend so a double top would be rare. Reactions are common but that's countertrend trading.

[Atlatyl]

Same idea, better entry. Surprise surprise...lol
AD line falling, VIX rising
98.25 is Pivot R2
RISK:
Lotta guys like to go in full size, then peel off contracts as profit occurs...this has never made sense to me...why risk multiple contracts when the risk is highest at entry?
(even though you're looking for a low risk entry, of course)
I like to trade what I call "Scout, Squad, Platoon", where I divide my size into thirds. First third is the Scout...he is ultimately expendable, but he's your eyes and ears. He gets a little more freedom/lattitude. If he indicates the way's clear, then the Squad gets inserted. More confirmation at the Platoon piles on. Then I like to keep them together till the fight's over: a large enemy encampment (support).
Scout's out right now...
Loose targets for now are: T1 is around 86.5...around the open, T2 is Yesterdays high around 73.5, T3 is a gap fill and todays center around 65.5.

[Atlatyl]

well there you go, good example of a gap over 20 points with a lower fill probability; didn't have the ooopmh to get thru resistance, nor the selling interest to fill; Chop Suey

[Atlatyl]

Originally Posted by NarN

Good info about gaps, tnx for that.

I don't value a previous high as big resistance in an uptrend. It's an uptrend so a double top would be rare. Reactions are common but that's countertrend trading.

I guess it's all in one's definition of trend, as always
Here's what I see, and this particular test today is an important high, because it is the area where price broke the uptrend in May.

[Atlatyl]

Tuesday AM
Upward bias as long as we're over yesterdays center and VWAP (Volume Weighted Average Price) is climbing. First stop oughta be a test of yesterday's high, which will determine the rest of the day, me thinks. Price can't get past 96.5, should go to yesterday's center for starters. Here's some levels I'm looking at.

[Atlatyl]

VWAP turning down, 95 resistance

[Atlatyl]

Last trade good to center; this one, if it can stay under 95, and get under yestercenter, then i'm smoking hopium for fill of yesterdays gap. If 95 holds, then it's probably onward and upward, at least to yesterday's high. 87.25 should confirm down move.

[Atlatyl]

buy support, sell resistance.

[NarN]

In an uptrend that would be buy support, cover resistance. So far I have seen you take only shorts. Are you a contrarian by nature?

I haven't traded this week but I'm still holding a small runner from ES 1054.

[Atlatyl]

Rinse and repeat.
Wedge again.
maybe, of course ;-)