Slope Of Hope with Tim Knight

Monday Thoughts (by Springheel Jack)

My post will be a bit different today. As I have mentioned frequently, the current move up from the December low on SPX hasn't delivered much in the way of decent overall trendlines, so I'm going to present the consensus view from the EWers, who have had an impressively good handle on the current move up. You'll have to excuse my amateurish EW labelling and chart, but while I always keep an eye on the EW view, it isn't my thing really, and I rarely mark up an EW count on a chart.

I know that elliot wave counts are anathema to a lot of my readers, but like any form of analysis you get the best results from the best practitioners and I have a lot of confidence is the ones I follow. The shallow retracements on trendline breaks that we have seen on the current move up from the mid December low are also strongly characteristic of wave 3 moves I've seen in the past, so the overall thesis is reasonable, though I don't much care for the idea that SPX is going to rise much higher, as that seriously weakens the case that we are still in a bear market:

Overbought Condition? (by eMiniSchool)

Treacherous Tuesday (by BBFinance)

As I mentioned in the morning, it was the third push up from the triangle and the pushes are now complete. Before today, the last seven trading days was a churn. The market was going round in circle and was making it difficult to find any direction. With today’s price action the direction of the market is becoming much clear. I will have to wait for tomorrow to decide whether I will close my short position on January 12 or 20. But either way I expect the market to go down from here. But may be one last attempt to retest today’s high will be made tomorrow.

It was just 11 point gain in SPX for the day. And I think the market will soon give back those 11 points and some more. The interesting thing to notice is how the sentiment changes. Before the year end, when I was talking about Santa Rally, there was general skepticism around. Not many believe that SPX will come close to 1300. And yet today, there is talk of SPX crossing 1400!

Important Timing Update (by eMiniSchool.com)

Precious Metals Correction?

That was a decent move down yesterday, but it wasn't that encouraging for more downside. Marginal new lows on strong positive RSI divergence are generally a reversal signal and we're seeing a strong bounce so far overnight. I'm seeing a possible falling wedge on the ES 60min chart and I have declining resistance in the 1243.5 - 44 area. A reversal there would confirm the wedge, which indicates back to the recent ES high:

Remember the .35% Support? (by eMiniSchool.com)

 

New Analog, If You Dare....

I have had enough damage done from marrying myself to an analog that I approach them with caution these days. Just like Elliott Waves, analogs represent for me enough disappointment that I view them with suspicion. The difference, though, is that in my opinion Elliott Waves are greatly for explaining what happened (after the fact), whereas analogs can actually have some utility for predictive value.

GS About to Start Wave 3 (by Leaf_West)

Because I know Tim is a big supporter of EWT, I thought I would put up a post on GS ...

I'm long GS and I am watching here as the stock looks like it has completed a Wave 2 retracement, and is about to start a 3rd wave push higher ...

GS 10-Minute Charts

Wave 2 pull-backs are very emotional as buyers and sellers battle it out ... they typically end at the 78.6% Fib level as GS just did .

The 2nd wave ended right in the projected target zone and is now on the cusp of breaking a down trend line.

GS 60-Minute Chart

It has to be determined whether or not the 3rd wave is just that ...  a 3rd wave in a corrective bounce, or whether it leads to a 5th wave push higher.  We can figure that out when the 3rd wave is over and the pull-back begins.

Here is the Contraction Pattern I am hawking right now ... it looks like it is going to pull-back before breaking the move higher.

GS 3-Minute Chart

Cheers ... Leaf_West (please visit me at my blog (http://blog.tradingwithleafwest.com/)

Dow Support Levels/ Scalping (by eMiniSchool.com)

Over the last few months we have been talking about the .35% symmetry support. As the market was falling in August it seemed impossible for the support to hold but it did and from the support we have rallied 1500 DOW points.

It seems like we would have to pullback from where we are now but if we look at the 30 Minute chart you can see the .35% has held again at the 11,600 level. As long as we stay above the 11,600 this market does have a shot at making a new high above the 12,900 high. As of right now the bigger trend and 30 minute trend is stll up. 

It seems like we should pullback but if we can follow through today to the upside we could get a short squeeze from the overbought daily levels as the weekly and monthly chart kicks in. The next two days are going to be very important. Right now the daily NQ candle looks like a DOJI but we still have a few more hours left in todays session.

This is our last bigger picture update from yesterday  http://wwweminischool.wordpress.com/2011/11/08/what-if/

** If you are intrested in day trading www.ScalpingTheMarkets.com is having a free Webinar this Thursday. To join just go to the site and register as a free member and register for the Webinar.

 

Which Type Trader Are You? (by Market Sniper)

This post may offend many and that is not its intention. This is a think piece I have been formulating in my mind for quite some time now.  Its purpose is to get you to think about your trading methodology(s) and setups in a critical light.

To my way of thinking, traders who utilize technical analysis all fall into three broad groups (traders who use purely fundamental analysis are excluded from this type of grouping).

The Prognosticator

In this group I include Elliot Wave traders, Gann traders and astrological traders. These traders trade in the future. Based on what they say may happen and some go as far as to say what WILL happen. When a trade is a failure, they use misinterpretation of past price action as the excuse for the failed trade. It seems that Elliot wave traders (mostly sellers of the system) are in a constant civil war as to "correct" interpretation. Gann followers can spend their entire trading life searching for his "missing" piece. A lot of legend has been created around WD Gann, promulgated by promoters of his methodology. WD Gann was prolific in his writings and covered a multitude of areas. Regardless of what happens next, some part of his work can be given credit for "calling" the "move." Too bad we lack foresight to know which one! He is also been credited to have died with a tidy fortune due to his trading. Interviews with his son (who happened to have been in the banking business) revealed that he died in modest means and made the bulk of his money promoting his ideas over his life time. The foremost (and longest being tracked) in the astrological trading group is Arch Crawford. In over 25 years of his trading service, he has had flashes of brilliance. However, according to Hulbert, his record, overall, has well under performed the market during the long period tracked. Prognosticators rely on interpretation of price. So much for the prognosticators.