Posted by chartboy on 23rd of Aug 2011 at 08:31 pm
There is nothing magical about any MA...in order to establish
any new position you should never be relying on a single indicator.
Instead, you should be relying on several different indicators, as
well as chart patterns, in order to establish a sequence of events
that would help you determine that a new position is warranted.
(This trading methodolgy, also known as "sequence trading"
relies on all disciplines of charting including but not
limited to the use of studies for time/price relationships,
Fibonacci relationships, meausured move chart patterns etc
etc).
In this particular case, one of the first conditions of a
potential short sale on the SPX has just been met today with a
close of the 2 period RSI above 70, (indicating an overbought
condition), in a downtrending market, (as defined by being below a
declining 200dma). However, the short term trend is still up,
with clear higher highs and higher lows being made intraday...as
well as clear upside price targets generated from the breakout of
the base today "projecting" a continued move up to the 1180-1190
zone...in addition to the attractive forces of an unfilled gap in
that same area.
Accordingly, at this time, there are no indications that new
shorts are warranted until we at least attempt to move to the
1180-1190 and the market makes some form of lower high/lower low
after attempting to rally into that area.
Don't know about the ema but I think we are likely long until
1187 or maybe even the 1222 area- that's where you should be
expecting a turnaround. With all the hoopla about Jackson
Hole on Friday I'm thinking we'll probably be right at one of those
areas on Friday. I'll be waiting on the sidelines that day.
I really hate surprises.
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SPX 20 EMA
Posted by lakez on 23rd of Aug 2011 at 07:32 pm
If we get close to the 20EMA and maybe touch it , you guys feel like its a short or should it go through?
There is nothing magical about
Posted by chartboy on 23rd of Aug 2011 at 08:31 pm
There is nothing magical about any MA...in order to establish any new position you should never be relying on a single indicator. Instead, you should be relying on several different indicators, as well as chart patterns, in order to establish a sequence of events that would help you determine that a new position is warranted. (This trading methodolgy, also known as "sequence trading" relies on all disciplines of charting including but not limited to the use of studies for time/price relationships, Fibonacci relationships, meausured move chart patterns etc etc).
In this particular case, one of the first conditions of a potential short sale on the SPX has just been met today with a close of the 2 period RSI above 70, (indicating an overbought condition), in a downtrending market, (as defined by being below a declining 200dma). However, the short term trend is still up, with clear higher highs and higher lows being made intraday...as well as clear upside price targets generated from the breakout of the base today "projecting" a continued move up to the 1180-1190 zone...in addition to the attractive forces of an unfilled gap in that same area.
Accordingly, at this time, there are no indications that new shorts are warranted until we at least attempt to move to the 1180-1190 and the market makes some form of lower high/lower low after attempting to rally into that area.
Hopefully this provides some insight.
C
Don't know about the ema
Posted by johnc on 23rd of Aug 2011 at 08:14 pm
Don't know about the ema but I think we are likely long until 1187 or maybe even the 1222 area- that's where you should be expecting a turnaround. With all the hoopla about Jackson Hole on Friday I'm thinking we'll probably be right at one of those areas on Friday. I'll be waiting on the sidelines that day. I really hate surprises.