In all seriousness, this is a fairly reliable indicator to keep
checks on for swing traders or people who "check in" with the
market in the evenings. Not a "red alert", but something to
be used in conjunction with other indicators and levels of support
and resistance. Keeping that in mind, decent market pullbacks
usually have a $NYMO divergence before they happen. Not a
guarantee that it will happen as strong melting trends just keep
going on. Looks like we also ended the day with a divergence
with bonds and the VIX (although the VIX divergence is pretty weak
and can almost be argued that after a quick VIX rally, the VIX will
probe lower to find better support). Finally, the $USD is
well off the lows of December (despite the very weak day today).
Kalinm - feel free to post any relevant chart but again my
advice is to not get consumed with calling exact tops. If you see
something like ending patterns, divergences, overbought reading
that concern you then consider hedging against the prevailing
trend.
In reference to your NYMO chart below, I prefer to see
divergence develop the same day and today's action saw higher
prices on SPX and the NYMO moving higher than the previous
day.
Again, trying to call every turn precisely is impossible and a
RULE traders should avoid. Hedging fine but until the TREND changes
it's best to focus trading primarily in the direction of the trend.
How many trades have you neglected or missed fearing a top. My
advice is to wait for a confirmed impluse down and then look to
short the rebound the forms a lower high on a higher degree
wave.
Yes, it was tough to spot those same day divergences on the
chart (kind of like finding a needle in a haystack). But
these divergences kind of stuck out like a sore thumb. First
two made the divergence with 3 days, today's with 4 days.
Again, I've kind of "Cherry picked" the cases where it turned
out sour. So all this needs to do is keep melting up here and
popping stops and divergences get wiped out.
Exactly, the NYMO is still black on your chart and it can break
higher on a strong move negating the so called divergence.
Clearly, there is some resistance here on the SPX as it tests
prior highs so we'll have to see how it resolves.
The main message is to not get consumed with picking exact tops
and instead play the best setups with proper management of
them.
"The main message is to not get consumed with picking exact tops
and instead play the best setups with proper management of them.
"
Steve, Matt
That's not that easy sometimes. As you often tell us the best
way to get in a trade is not at breakpoint but earlier.Yesterday
there was gap up in the market which I didn't want to buy but I set
a few buys at around the day before's close.
GTIV. Matt thought in the newsletter it would be a good buy now
with a stop below the MA's. I bought and if I had set a
stop below the MA's I would have been stopped out shortly
after.... I'm still in and more or less flat, but should have been
stopped out with a loss of 2 % or so.
OMX: I thought it could break out, bought @10 but didn't
want to see a penetration of the uptrend line @ around 9.85, and
set a stop @ 9.82 and was stopped out rather soon. (see Chart
1)
KBH: Bought @16.50 (more or less the close of the day before)
hoping for catch the low right at support (the uptrendline) . After
making higher lows the last 6 days I didn't want to make KBH to
trade below 16.25 so I set a stop there which was triggered. (see
Chart 2)
Isn't that proper management? In case of GTIV it was Matt's
proposal to do it so (which I did not follow
). OMX and KBH it was my idea
which was not a good one.
But when losing 1.5 % or 2 % with a trade and you have 3
mistrades in an hour or so you need a 5 % positive trade to
only get flat.
I own right now KMX and GTIV. I don't know what to do with GTIV
(should have been stopped out...) and I'm short yhoo from higher
levels. Even if yahoo gets to the target (MA @ 18.75 I suppose)
that would not be 5% to get flat.
I just want to say that it's not that easy, at least for me. My
goldstocks made it a good day yesterday, but a reversal could occur
anytime in goldstocks like the last 168 times.....
zwyss...take a tutorial with me and I will explain in detail
what I mean in regards to swing trade entries.
As far as trade entries, we can review those as well. I don't
buy extended stocks like KMX, KBH, and OMX without a vaild intraday
pattern or volume break.
Simply put, I don't simply buy support...I look to buy support
that is FOLLOWED by a trigger and then immediately put a stop in
place once trade has entered. NO TRIGGER, NO TRADE. I never said it
was easy but one must have a plan vs simply buying and hoping.
I don't have time to go thru each of your trades now but here is
a quick example of a VALID SETUP and TRIGGER for GTIV. I would
prefer to see a good setup form on a 60 minute chart. I hope
this helps to somewhat explain the types of things I'm looking for
in a trade. Don't attempt to trade too many stocks either as it's
tough to monitor, that's why I prefer a 60 minute setup vs a 5
minute setup.
If it forms a higher low above 14.78 which is better for an IHS
pattern, I would put my stop below that number.
The pattern you show on the 10 minute chart would be a small IHS
pattern. Note that it only measures a little over 20 cents so keep
that in mind as an initial target area.
Thank you Steve. Of course you are right but not all of us have
the time to follow a 5 min Chart. I see your point with GTIV, but
sometimes I have to set an entry and a stop before the opening and
let it go and hope for the best....
Suppose the only way for people who trade daily or hourly charts
is to work with wider stops....
As I stated below, I prefer to see a pattern form on the 60
minute chart vs a 5 minute chart. I don't have time to monitor many
things on a 5 minute either. Thus, until you see such a pattern
and/or trigger on a larger time frame then be patient or wait for a
volume expansion break of resistance.
man we do need another bear market to get people going again - I
think the masses are now like a turkey that's been fattened up
before the slaughter - the masses are fat, dumb, and happy, market
is up 4 years in a row, investing is easy just buy and hold - we
need a good scare to get people interested again LOL
though if the SPX goes to 1550 - 1600 that could take a
while
$NYMO divergence
Posted by kalinm on 10th of Jan 2013 at 05:02 pm
Am I allowed to post this?
In all seriousness, this is a fairly reliable indicator to keep checks on for swing traders or people who "check in" with the market in the evenings. Not a "red alert", but something to be used in conjunction with other indicators and levels of support and resistance. Keeping that in mind, decent market pullbacks usually have a $NYMO divergence before they happen. Not a guarantee that it will happen as strong melting trends just keep going on. Looks like we also ended the day with a divergence with bonds and the VIX (although the VIX divergence is pretty weak and can almost be argued that after a quick VIX rally, the VIX will probe lower to find better support). Finally, the $USD is well off the lows of December (despite the very weak day today).
Kalinm - feel free to
Posted by steve on 10th of Jan 2013 at 05:35 pm
Kalinm - feel free to post any relevant chart but again my advice is to not get consumed with calling exact tops. If you see something like ending patterns, divergences, overbought reading that concern you then consider hedging against the prevailing trend.
In reference to your NYMO chart below, I prefer to see divergence develop the same day and today's action saw higher prices on SPX and the NYMO moving higher than the previous day.
Again, trying to call every turn precisely is impossible and a RULE traders should avoid. Hedging fine but until the TREND changes it's best to focus trading primarily in the direction of the trend. How many trades have you neglected or missed fearing a top. My advice is to wait for a confirmed impluse down and then look to short the rebound the forms a lower high on a higher degree wave.
http://stockcharts.com/h-sc/ui?s=$NYMO&p=D&yr=0&mn=6&dy=15&id=p21289806945&a=244074647&r=1357856610352&cmd=print
Yes, it was tough to
Posted by kalinm on 10th of Jan 2013 at 06:04 pm
Yes, it was tough to spot those same day divergences on the chart (kind of like finding a needle in a haystack). But these divergences kind of stuck out like a sore thumb. First two made the divergence with 3 days, today's with 4 days. Again, I've kind of "Cherry picked" the cases where it turned out sour. So all this needs to do is keep melting up here and popping stops and divergences get wiped out.
Exactly, the NYMO is still
Posted by steve on 10th of Jan 2013 at 06:18 pm
Exactly, the NYMO is still black on your chart and it can break higher on a strong move negating the so called divergence. Clearly, there is some resistance here on the SPX as it tests prior highs so we'll have to see how it resolves.
The main message is to not get consumed with picking exact tops and instead play the best setups with proper management of them.
Title: Trading "The main message is
Posted by zwyss on 11th of Jan 2013 at 03:40 am
"The main message is to not get consumed with picking exact tops and instead play the best setups with proper management of them. "
Steve, Matt
That's not that easy sometimes. As you often tell us the best way to get in a trade is not at breakpoint but earlier.Yesterday there was gap up in the market which I didn't want to buy but I set a few buys at around the day before's close.
GTIV. Matt thought in the newsletter it would be a good buy now with a stop below the MA's. I bought and if I had set a stop below the MA's I would have been stopped out shortly after.... I'm still in and more or less flat, but should have been stopped out with a loss of 2 % or so.
OMX: I thought it could break out, bought @10 but didn't want to see a penetration of the uptrend line @ around 9.85, and set a stop @ 9.82 and was stopped out rather soon. (see Chart 1)
KBH: Bought @16.50 (more or less the close of the day before) hoping for catch the low right at support (the uptrendline) . After making higher lows the last 6 days I didn't want to make KBH to trade below 16.25 so I set a stop there which was triggered. (see Chart 2)
Isn't that proper management? In case of GTIV it was Matt's proposal to do it so (which I did not follow
). OMX and KBH it was my idea
which was not a good one.
But when losing 1.5 % or 2 % with a trade and you have 3 mistrades in an hour or so you need a 5 % positive trade to only get flat.
I own right now KMX and GTIV. I don't know what to do with GTIV (should have been stopped out...) and I'm short yhoo from higher levels. Even if yahoo gets to the target (MA @ 18.75 I suppose) that would not be 5% to get flat.
I just want to say that it's not that easy, at least for me. My goldstocks made it a good day yesterday, but a reversal could occur anytime in goldstocks like the last 168 times.....
zwyss...take a tutorial with me
Posted by steve on 11th of Jan 2013 at 07:47 am
zwyss...take a tutorial with me and I will explain in detail what I mean in regards to swing trade entries.
As far as trade entries, we can review those as well. I don't buy extended stocks like KMX, KBH, and OMX without a vaild intraday pattern or volume break.
Simply put, I don't simply buy support...I look to buy support that is FOLLOWED by a trigger and then immediately put a stop in place once trade has entered. NO TRIGGER, NO TRADE. I never said it was easy but one must have a plan vs simply buying and hoping.
I don't have time to go thru each of your trades now but here is a quick example of a VALID SETUP and TRIGGER for GTIV. I would prefer to see a good setup form on a 60 minute chart. I hope this helps to somewhat explain the types of things I'm looking for in a trade. Don't attempt to trade too many stocks either as it's tough to monitor, that's why I prefer a 60 minute setup vs a 5 minute setup.
http://stockcharts.com/h-sc/ui?s=GTIV&p=5&b=4&g=0&id=p60288840337&a=288800983&r=1357909301745&cmd=print
hi steve,zwyss
Posted by morgan8 on 11th of Jan 2013 at 08:42 am
and although i am not trying to drag you into a whole tutorial here and now steve i just thought i would throw my chart in for a comment
i picked out AGO from the newsletter today. and then drilled down from the daily chart provided to a 10 minute view that looked ok to me.
so my trigger is now a break of the line at 15.01- 15.02 with stop just under 14.78
is this about how you would approach it .
Excellent work Morgan...I could use
Posted by steve on 11th of Jan 2013 at 08:45 am
Excellent work Morgan...I could use 5 assistants
If it forms a higher low above 14.78 which is better for an IHS pattern, I would put my stop below that number.
The pattern you show on the 10 minute chart would be a small IHS pattern. Note that it only measures a little over 20 cents so keep that in mind as an initial target area.
thank you i will keep
Posted by morgan8 on 11th of Jan 2013 at 09:03 am
thank you i will keep an eye on 15.22 also if it triggers
Thank you Steve. Of course
Posted by zwyss on 11th of Jan 2013 at 08:31 am
Thank you Steve. Of course you are right but not all of us have the time to follow a 5 min Chart. I see your point with GTIV, but sometimes I have to set an entry and a stop before the opening and let it go and hope for the best....
Suppose the only way for people who trade daily or hourly charts is to work with wider stops....
As I stated below, I
Posted by steve on 11th of Jan 2013 at 08:44 am
As I stated below, I prefer to see a pattern form on the 60 minute chart vs a 5 minute chart. I don't have time to monitor many things on a 5 minute either. Thus, until you see such a pattern and/or trigger on a larger time frame then be patient or wait for a volume expansion break of resistance.
man we do need another
Posted by matt on 11th of Jan 2013 at 01:03 am
man we do need another bear market to get people going again - I think the masses are now like a turkey that's been fattened up before the slaughter - the masses are fat, dumb, and happy, market is up 4 years in a row, investing is easy just buy and hold - we need a good scare to get people interested again LOL
though if the SPX goes to 1550 - 1600 that could take a while
fat, dumb and happy! Who
Posted by Palladin on 11th of Jan 2013 at 09:53 am
fat, dumb and happy! Who could ask for anything more!