Friday, May 25, 2012

SLTD-Projection & 1972 - 2012 Analogy (40 Year Cycle)

Red MTD # 11 LOW + Blue ITD #2 LOW = 2012-05-18 (Fri)
Red MTD # 12 HIGH + Blue ITD #3 HIGH = 2012-06-01-04 (Fri-Mon)
Magenta SLTD # 4 LOW + Black LTD #8 LOW + Red MTD #1 LOW + Blue ITD #4 LOW = 2012-06-08 (Fri)
Light Blue SSLTD #16 HIGH ? + Magenta SLTD # 5 HIGH + Black LTD #9 HIGH + Red MTD #2 HIGH + Blue ITD #1 HIGH = 2012-08-29 (Wed)
Magenta SLTD # 6 LOW = 2013-02-27 (Wed)
Light Blue SSLTD #16 HIGH ? + Magenta SLTD # 7 HIGH = 2013-06-03 (Wed)


Thursday, May 24, 2012

Time + Price = June 4th HIGH in SPX ?


S&P 500 - NYMO + % Stocks above 50MA

John Hampson's Update: Percentage of stocks above the 50MA shows how extreme oversold we just reached, but again from that kind of level we have previously seen v-bounces or more extended basing, lasting from a couple of weeks to a couple of months.
Source: IndexIndicators
But hopefully the message is clear: from such extreme readings in Nymo, % stocks above 50MA and CBI (which hit 11 on Friday), the nominal bottom was close.
My models show downward pressure into the end of next week. What happens the last couple of days of this week I therefore consider to be key. If stocks can rally further away from their lows then I would expect Euro and oil to reverse and join them and for a v-bounce low to be happening, with some consolidation only into the end of next week. If pro-risk alternatively falls and takes out last week's lows then I will be looking to attack on the buy side again once we see the Nymo divergence and that would most likely after the end of next week once positive pressure emerges.

Tuesday, May 22, 2012

STD Green Week (May 21-25)























































2012-Feb-27 (Mon) = Green = 10.30H, 11.15L, 12.20H, 2.00L, 3.40H or Inverse
2012-Feb-28 (Tue) = Red = (9:55-10:10H), 79% 10:20L, 11:40H, 68%/32% Inversion, 13:00L, 14:00H, 15:10L
2012-Feb-29 (Wed) = Blue = (9.40H), 10.00-30 Low, 12.40H, 1.40L, 3.00-30H
2012-Mar-01 (Thu) = Orange = (9.40L), 10.00H, 11.00L, 12.30H, 2.30L, 3.20-50H
2012-Mar-02 (Fri) = Green = 10.30H, 11.15L, 12.20H, 2.00L, 3.40H
 

Yesterday was a SU day closing near the day's high.

Tuesday’s bias is an Inversion day with 79% chance for a 9:55 - 10:10 LOW and a 11:40 HIGH +/-30. There will be another Inversion with 68% chance for a last hour LOW and 32% chance for a last hour HIGH. The 15:10 CIT should be a LOW = (9:55-10:10H), 79% 10:20L, 11:40H, 68%/32% Inversion, 13:00L, 14:00H, 15:10L

[ We are currently in a ITD-inversion window ]

http://time-price-research-astrofin.blogspot.de/2012/05/delta-tides-may-1st-to-august-1st-2012.html


2012-05-18 (Fri) = Tidal CIT
2012-05-18 (Fri) = AI 0
2012-05-19 02:22 (Sat) = MER 180 MAR [helio]
2012-05-19 11:35 (Sat) = Moon @ Apogee
2012-05-20 18:47 (Sun) = New Moon = Solar Eclipse
2012-05-20 21:08 (Sun) = MER 180 SAT [helio]
2012-05-21-22 (Mon-Tue) = Tidal CIT
2012-05-21 (Mon) = ITD #(1-x) HIGH [+/- 2 TD] = MTD #12 ?
2012-05-23 10:14 (Wed) = VEN 180 JUP [helio]
2012-05-24-25 (Thu-Fri) = Tidal CIT
2012-05-25 (Fri) = ITD #2 LOW [+/- 2 TD]
2012-05-25 (Fri) = AI 0
2012-05-25 11:31 (Fri) = MER 0 JUP [helio]
2012-05-26 03:47 (Sat) = MER 180 VEN [helio]
2012-05-27 11:08 (Sun) = MER 180 EAR [helio]
2012-05-27 16:19 (Sun) = SUN 0 MER
2012-05-28 (Mon) = Bradley CIT [geo & helio]
2012-05-28 15:16 (Mon) = First Quarter
2012-05-29 (Tue) = Tidal CIT
2012-05-30 10:24 (Wed) = VEN 120 URA [helio] = MWW-CIT
2012-05-30 20:40 (Wed) = MER @ 88 [helio] = MWW-CIT
2012-06-01 (Fri) = ITD #3 HIGH [+/- 2 TD] = MTD #12 ?





























Monday, May 21, 2012

May 22 = ITD & MTD LOW ?


The Moon cycles turned Bearish again for a possible Eclipse Panic Low near the 21st

The dual Moon cycles shown as white and yellow lines on the charts are gradually going back in phase for the Summer and this makes trading the Moons more reliable as Price is more likely to follow the lines in the periods when they are both going down or up together. We can see this with the early April and early May declines matching the period when both lines were going down together, but the Eclipse of May 20th is causing a Panic low like the November 25th eclipse suggesting a large rebound into the Moon in Leo of the 25th as seen in the charts below and a sharp rebound back to 1340-50 is quite possible this week.




















































Monday, May 14, 2012

STD Red Week | May 14-18





Delta - Tides - Astro-Events

2012-05-11 (Fri) = ITD #(1) = LOW [+/- 2 TD]
2012-05-13-14 (Sun-Mon) = Tidal CIT
2012-05-13 08:27 (Sun) = SUN 0 JUP = Level 2
2012-05-13 13:33 (Sun) = JUP 180 EAR [helio]
2012-05-15 03:51 (Tue) = MER @ 358 [helio] = MWW-CIT
2012-05-15 09:27 (Tue) = VEN (R) = Level 1
2012-05-16 10:55 (Wed) = MAR 120 PLU = Level 2
2012-05-16 15:15 (Wed) = MER 0 URA [helio]
2012-05-18 (Fri) = Tidal CIT
2012-05-21 (Mon) = ITD #(1-x) = HIGH [+/- 2 TD] = MTD #12 ?

See also HERE

Thursday, May 10, 2012

Eris | The 10th Planet

Eris (formerly known as UB 313 or Xena, dubbed the 10th planet in the media) has first been first spotted in 2003. In 2005 astronomers have discovered that Eris is actually larger in size than Pluto. Eris has very similar astrological qualities than Jupiter. That means Eris is not a planet of discord, but a planet of good fortune and success. In fact, Eris is the next best thing in astrology after Jupiter. Eris is even better than Venus. One reason for this is that Eris moves much slower than Venus. Therefore the beneficial influence of Eris is much longer lasting than the beneficial influence of Venus. Venus is combination with Jupiter creates highs on hourly charts. Eris in combination with Jupiter creates highs on daily and weekly financial charts. See also:

Markus Rose: The 10th Planet "ERIS"
Eris Ephemeris from 1900 to 2030 (Eris' position is currently @
21Ar44'42" = 21.25°)
SE_Aspectarian - Astrological Aspectarian (freeware) to calculate aspects of Eris to other planets e.g.
Venus 000° 21.250       02/26/2012 14:43
Sun 000° 21.250           04/10/2012 17:43
Mercury 000° 21.250    05/03/2012 21:29
Mars 180° 21.250         08/09/2012 15:55
Mercury 180° 21.250    09/29/2012 17:08
Sun 180° 21.250           10/14/2012 04:50
Venus 180° 21.250       11/14/2012 22:59


Saturday, May 5, 2012

Delta - Tides - Astro-Events: May 1st to August 1st 2012























Tidal CITs @ Willets Point [NYC] 
2012-04-18-19 (Wed-Thu)
2012-04-27-29 (Fri-Sun)
2012-05-07 (Mon)
2012-05-13-14 (Sun-Mon)
2012-05-18 (Fri)
2012-05-21-22 (Mon-Tue)
2012-05-24-25 (Thu-Fri)
2012-05-29 (Tue)
2012-06-05 (Tue)
2012-06-13-14 (Wed-Thu)
2012-06-16 (Sat)
2012-06-23-26 (Sat-Tue)
2012-06-28-29 (Thu-Fri)
2012-07-04 (Wed)
2012-07-12-13 (Thu-Fri)
2012-07-22-23 (Sun-Mon)
2012-07-28 (Sat)
2012-08-02 (Thu)

Intermediate-Term Delta (ITD) 
2012-04-02 (Mon) = ITD #9 = HIGH [= - 2TD] = MTD #10 = LTD #7 = SLTD #3
2012-04-23 (Mon) = ITD #11 = LOW [= exact] = MTD #11 = LTD #8
2012-05-01 (Tue) = ITD #(11-x) = HIGH [= +2 TD]
2012-05-07 (Mon) = ITD #(11-y) = LOW [+/- 2 TD]
2012-05-09 (Wed) = ITD #1 HIGH [+/- 2 TD] = MTD #12 ?
2012-05-11 (Fri) = ITD #(1) = LOW [+/- 2 TD]
2012-05-21 (Mon) = ITD #(1-x) = HIGH [+/- 2 TD] = MTD #12 ?
2012-05-25 (Fri) = ITD #2 LOW [+/- 2 TD]
2012-06-01 (Fri) = ITD #3 HIGH [+/- 2 TD] = MTD #12 ?
2012-06-11 (Mon) = ITD #4 LOW [+/- 2 TD] = MTD #1 ?
2012-06-25 (Mon) = ITD #5 HIGH [+/- 2 TD]
2012-07-03 (Tue) = ITD #6 LOW [+/- 2 TD] = MTD #1 ?
2012-07-09 (Mon) = ITD #7 HIGH [+/- 2 TD] = MTD #2 ?
2012-07-17 (Tue) = ITD #8 LOW [+/- 2 TD]
2012-08-01 (Wed) = ITD #9 HIGH [+/- 2 TD] = MTD #2 = LTD #9 ?
2012-08-06 (Mon) = ITD #10 LOW [+/- 2 TD] = MTD #3 ?


Summary: Delta - Tides - Astro-Events

Miles Wilson Walker SuperTiming CITs (MWW-CIT) & Ray Merriman's Cosmic Turn-Signatures
(Level 1 = major CIT / Level 2 = intermediate CIT / Level 3 = shortterm CIT)
 


2012-04-18-19 (Wed-Thu) = Tidal CIT
2012-04-23 (Mon) = ITD #11 LOW [= exact] = MTD #11 = LTD #8
2012-04-23 (Mon) = Bradley CIT [geo & helio]
2012-04-23 19:51 (Mon) = SUN 120 MAR = Level 3
2012-04-27-29 (Fri-Sun) = Tidal CIT
2012-04-29 04:21 (Sun) = SUN 120 PLU = Level 3
2012-04-29 04:57 (Sun) = First Quarter
2012-05-01 (Tue) = ITD #11-x HIGH [= +2 TD]
2012-05-03 (Thu) = AI 0
2012-05-05 (Sat) = Bradley CIT [geo & helio]
2012-05-05 22:33 (Sat) = Moon @ Perigee
2012-05-05 22:35 (Sat) = Full Moon = SuperMoon
2012-05-06 (Sun) = AI 9
2012-05-06 10:17 (Sun) = VEN 0 SAT [helio]
2012-05-07 (Mon) = Tidal CIT
2012-05-07 (Mon) = ITD #11-y LOW [+/- 2 TD]
2012-05-09 (Wed) = ITD #1 HIGH [+/- 2 TD] = MTD #12 ?
2012-05-10 (Thu) = Bradley CIT [geo & helio]
2012-05-11 (Fri) = ITD #(1) LOW [+/- 2 TD]
2012-05-11 (Fri) = AI 0
2012-05-12 16:47 (Sat) = Third Quarter
2012-05-13-14 (Sun-Mon) = Tidal CIT
2012-05-13 08:27 (Sun) = SUN 0 JUP = Level 2
2012-05-13 13:33 (Sun) = JUP 180 EAR [helio]
2012-05-15 03:51 (Tue) = MER @ 358 [helio] = MWW-CIT
2012-05-15 09:27 (Tue) = VEN (R) = Level 1
2012-05-16 10:55 (Wed) = MAR 120 PLU = Level 2
2012-05-16 15:15 (Wed) = MER 0 URA [helio]
2012-05-18 (Fri) = Tidal CIT
2012-05-18 (Fri) = AI 0
2012-05-19 02:22 (Sat) = MER 180 MAR [helio]
2012-05-19 11:35 (Sat) = Moon @ Apogee
2012-05-20 18:47 (Sun) = New Moon = Solar Eclipse
2012-05-20 21:08 (Sun) = MER 180 SAT [helio]
2012-05-21-22 (Mon-Tue) = Tidal CIT
2012-05-21 (Mon) = ITD #(1-x) HIGH [+/- 2 TD] = MTD #12 ?
2012-05-23 10:14 (Wed) = VEN 180 JUP [helio]
2012-05-24-25 (Thu-Fri) = Tidal CIT
2012-05-25 (Fri) = ITD #2 LOW [+/- 2 TD]
2012-05-25 (Fri) = AI 0
2012-05-25 11:31 (Fri) = MER 0 JUP [helio]
2012-05-26 03:47 (Sat) = MER 180 VEN [helio]
2012-05-27 11:08 (Sun) = MER 180 EAR [helio]
2012-05-27 16:19 (Sun) = SUN 0 MER
2012-05-28 (Mon) = Bradley CIT [geo & helio]
2012-05-28 15:16 (Mon) = First Quarter
2012-05-29 (Tue) = Tidal CIT
2012-05-30 10:24 (Wed) = VEN 120 URA [helio] = MWW-CIT
2012-05-30 20:40 (Wed) = MER @ 88 [helio] = MWW-CIT
2012-06-01 (Fri) = ITD #3 HIGH [+/- 2 TD] = MTD #12 ?
2012-06-01 (Fri) = Bradley CIT [geo & helio]
2012-06-01 11:22 (Fri) = MER 180 PLU [helio]
2012-06-03 08:15 (Sun) = Moon @ Perigee
2012-06-04 (Mon) = 0
2012-06-04 06:12 (Mon) = Full Moon = SuperMoon = Lunar Eclipse
2012-06-04 11:26 (Mon) = NEP (R) = Level 1
2012-06-05 (Tue) = Tidal CIT
2012-06-05 (Tue) = AI 10
2012-06-05 (Tue) = MER 180 Galactic Center
2012-06-07 21:23 (Thu) = SUN 90 MAR = Level 3
2012-06-10 (Sun) = AI 9
2012-06-10 06:55 (Sun) = MAR 0 SAT [helio]
2012-06-10 21:49 (Sun) = MER 180 NEP [helio]
2012-06-11 (Mon) = ITD #4 LOW [+/- 2 TD] = MTD #1 ?
2012-06-11 05:41 (Mon) = Third Quarter
2012-06-12 (Tue) = Bradley CIT [geo & helio]
2012-06-12 00:00 (Tue) = CIT of (Decl MER+MAR-VEN) = MWW-CIT
2012-06-13-14 (Wed-Thu) = Tidal CIT
2012-06-13 (Wed) = AI 0
2012-06-13 07:03 (Wed) = SUN 120 SAT = Level 2
2012-06-15 20:43 (Fri) = Moon @ Apogee
2012-06-16 (Sat) = Tidal CIT
2012-06-16 21:05 (Sat) = MER @ 178 [helio] = MWW-CIT
2012-06-17 00:00 (Sun) = SUN 180 Galactic Center
2012-06-18 18:20 (Mon) = MER 180 URA [helio]
2012-06-19 10:02 (Tue) = New Moon
2012-06-20 05:18 (Wed) = VEN 0 PLU [helio]
2012-06-20 18:08 (Wed) = Summer Solstice
2012-06-23-26 (Sat-Tue) = Tidal CIT
2012-06-24 (Sun) = AI 0
2012-06-25 (Mon) = ITD #5 HIGH [+/- 2 TD]
2012-06-25 01:42 (Mon) = SAT (D) = Level 1
2012-06-25 06:57 (Mon) = MER 0 SAT [helio]
2012-06-26 22:30 (Tue) = First Quarter
2012-06-27 00:00 (Wed) = MAR 90 Galactic Center
2012-06-27 10:05 (Wed) = VEN (D) = Level 1
2012-06-27 18:13 (Wed) = MER 0 MAR [helio]
2012-06-28-29 (Thu-Fri) = Tidal CIT
2012-06-29 (Fri) = AI 7
2012-06-29 09:44 (Fri) = SUN 180 PLU = Level 3
2012-06-29 14:54 (Fri) = PLU 0 EAR [helio]
2012-07-01 12:42 (Sun) = Moon @ Perigee
2012-07-03 (Tue) = ITD #6 LOW [+/- 2 TD] = MTD #1 ?
2012-07-03 13:52 (Tue) = Full Moon
2012-07-04 (Wed) = Tidal CIT
2012-07-04 19:00 (Wed) = Earth @ Aphelion
2012-07-05 02:33 (Thu) = MER 180 JUP [helio]
2012-07-05 03:13 (Thu) = MER par VEN = MWW-CIT
2012-07-07 (Sat) = 0
2012-07-09 (Mon) = ITD #7 HIGH [+/- 2 TD] = MTD #2 ?
2012-07-10 20:48 (Tue) = Third Quarter
2012-07-12-13 (Thu-Fri) = Tidal CIT
2012-07-13 01:56 (Fri) = URA (R) = Level 1
2012-07-13 12:02 (Fri) = Moon @ Apogee
2012-07-14 21:09 (Sat) = MER (R) = Level 3
2012-07-14 23:09 (Sat) = SUN 90 SAT = Level 2
2012-07-16 00:00 (Mon) = MER @ 268 [helio] = MWW-CIT
2012-07-17 (Tue) = ITD #8 LOW [+/- 2 TD]
2012-07-18 23:24 (Wed) = New Moon
2012-07-19 16:33 (Thu) = MER 0 PLU [helio]
2012-07-22-23 (Sun-Mon) = Tidal CIT
2012-07-23 (Mon) = AI 8
2012-07-23 22:38 (Mon) = VEN 0 NEP [helio]
2012-07-26 03:56 (Thu) = First Quarter
2012-07-28 (Sat) = Tidal CIT
2012-07-28 (Sat) = Bradley CIT [geo]
2012-07-28 19:52 (Sat) = MER 0 EAR [helio]
2012-07-29 (Sun) = Bradley CIT [helio]
2012-07-29 00:57 (Sun) = SUN 0 MER
2012-07-29 03:10 (Sun) = Moon @ Perigee
2012-08-01 (Wed) = ITD #9 HIGH [+/- 2 TD] = MTD #2 = LTD #9 ?
2012-08-01 22:27 (Wed) = Full Moon
2012-08-02 (Thu) = Tidal CIT
2012-08-03 00:00 (Fri) = VEN 180 Galactic Center
2012-08-04 23:16 (Sat) = MER 0 NEP [helio]
2012-08-06 (Mon) = ITD #10 LOW [+/- 2 TD] = MTD #3 ?
2012-08-08 00:25 (Wed) = MER (D) = Level 3
 

Thursday, April 26, 2012

Capturing Trend Days | Linda Bradford-Raschke

Linda Bradford Raschke (1995) - A trend day occurs when there is an expansion in the daily trading range and the open and close are near opposite extremes. The first half-hour of trading often comprises less than 10% of the day’s total range; there is usually very little intraday price retracement. Typically, price action picks up momentum going into the last hour — and the trend accelerates

A trend day can occur in either the same or the opposite direction to the prevailing trend on daily charts. The critical point is that the increased spread between the high and low of the daily range offers a trading opportunity from which large profits can be made in a short time. Traders must understand the characteristics of a trend day, even if interested only in intraday scalping. A trader anticipating a trend day should change strategies, from trading off support/resistance and looking at overbought/oversold indicators to using a breakout methodology and being flexible enough to buy strength or sell weakness. 

A trader caught off guard will often experience his largest losses on a trend day as he tries to sell strength or buy weakness prematurely. Because there are few intraday retracements, small losses can easily get out of hand. The worst catastrophes come from trying to average losing trades on trend days. Fortunately, it is possible to identify specific conditions that tend to precede a trend day. Because this can easily be done at night when the markets are closed, a trader can adjust his game plan for the next day and be prepared to place resting buy or sell stops at appropriate levels.

Classic Trend Day: A large opening gap created a vacuum on the buy side.
The market opened at one extreme and closed on the other. Note how it made higher highs and higher lows all day.
Also, volatility increased in the latter part of the day–another characteristic of trend days.
 
The Principle of Range Contraction/Expansion: Several types of conditions lead to trend days, but most involve some type of contraction in volatility or daily range. In general, price expansion tends to follow periods of price contraction, the phenomenon being cyclical. The market alternates between periods of rest or consolidation and periods of movement, or markup/markdown. Volatility is actually more cyclical than is price.

When a market consolidates, buyers and sellers reach an equilibrium price level — and the trading
range tends to narrow. When new information enters the marketplace, the market moves away from
this equilibrium point and tries to find a new price, or “value” area. Either longs or shorts will be
“trapped” on the wrong side and eventually forced to cover, aggravating the existing supply/demand imbalance.
 
Trend Day Down: In turn, the increase in price momentum attracts new market participants, and pretty soon a vicious cycle is created. Local pit traders, recognizing the one-way order flow, scramble to cover contracts. Instead of price reacting back as in normally trading markets, “positive feedback” is created — a condition in which and no one can predict how far the price will go. The market tends to gain momentum rather than to check back and forth.

We can tell when the market is approaching the end of contraction or congestion because the average daily range narrows. We know a potential breakout is at hand. However, it is difficult to predict the direction of the breakout because buyers and sellers appear to be in perfect balance. All we can do is prepare for increased volatility or range expansion!

Most breakout trading strategies let the market tip its hand as to which way it wants to go before entering. This technique sacrifices initial trade location in exchange for greater confidence that the market will continue to move in the direction of trade entry.

The good news is that breakout strategies have a high win/loss ratio. The bad news is that whipsaws can be brutal!



Tick Readings for Short-term day trading – Volatility conditions are important to quantify even if you are a short term
day trader. In a normal consolidation market, overbought/oversold type indicators, such as intraday tick readings,
can work well for S&P scalps.

  • NR7 — the narrowest range of the last 7 days (Toby Crabel introduced this term in his classic book, Day Trading With Short-term Price Patterns and Opening-range Breakout);
  • A cluster of 2 or 3 small daily ranges;
  • The point of a wedge-type pattern (which usually exhibits contracting daily ranges);
  • A Hook Day (wherein the open is above/below the previous day’s high/low — and then the price reverses direction; the range must also be narrower than the previous day’s range; leads traders to believe that a trend reversal has occurred, whereas the market has instead only formed a small consolidation or intraday continuation pattern);
  • Low volatility readings, based on such statistical measures as standard deviations or historical volatility ratios or indexes;
  • Large opening gaps (caused by a large imbalance between buyers and sellers);
  • Runaway momentum (markets with no resistance above in an uptrend or no support below in a downtrend. This condition differs from the above setups in that volatility has already expanded. In a momentum market, however, the huge imbalance between buyers and sellers continues to expand the trading range.
 

 
Fading extreme tick readings can be dangerous – On a trend day, a counter-trend strategy of fading extreme tick readings could result in substantial losses.

Average True Range highlights range contraction/expansion – The 3-Day Average True Range Indicator highlights how cyclical the phenomenon of range contraction/range expansion is. Volatility tends to be more cyclical than price.

Trading Strategies: A breakout strategy, or intraday trend-following method, can best capture a trend day. Wait for the market to tip its hand first as to which direction it is going to trend for the day. Rarely can this be determined by the opening price alone. Thus, most breakout strategies enter only after the market has already begun to move in one direction or the other, usually by a predetermined amount.

Add the following techniques to your repertoire. All of them will ensure you participate in a trend day. 
  • Breakout of the Early-morning Trading Range. The morning range is defined by the high and low made in the first 45-120 minutes. Different time parameters can be used, but the most popular one is the first hour’s range. Wait for this initial range to be established and then place a (1) buy stop above the morning’s high and a (2) sell stop below the morning’s low. A protective stop-and-reverse should always be left in place at the opposite end of he range once entry has been established.
  • Early Entry. Toby Crabel defined this as a large price movement in one direction within the first 15 minutes of the opening. The probability of continuation is extremely high. Once one or two extremely large 5-minute bars appear within the first 15 minutes, a trader must be nimble enough to enter on the next “pause” that usually follows. With many of these strategies, the initial risk can appear to be high. However, a trader must recognize that as the trading volatility increases so too does the potential for good reward. 
  • Range Expansion off the Opening Price. A predetermined amount is added or subtracted from the opening price. Though Toby Crabel also described this concept in his book, it was really popularized by Larry Williams. The amount can be fixed, or it can be a percentage of the previous 1-3 days’ average true range. With resting buy and sell stops in place, the trader will be pulled into the market whichever way price starts to move. Entry, often made in the first hour, can be made earlier than the breakout from the first hour’s range. In general, the further price moves away from a given point, the greater are the odds it will continue in that same direction. The ideal is continuation in the direction of the initial trend once the trade is entered.
Volatility tend to increase as a trend matures – Trend days also frequently occur in runaway momentum markets. There is little range contraction evident in the latter part of this trend move. Rather, emotions run high as the imbalance between supply and demand reaches an extreme. 
  • Price Breakout from the Previous Day’s Close. This strategy is similar to the above, with buy and sell stops based on a percentage of the previous 1-3 days’ range added to the previous close. The advantage to using the closing price is that resting orders can be calculated and placed in the market before the opening. The disadvantage is the potential for whipsaw if the market moves to fill a large opening price gap. (Another version of a volatility breakout off the open or closing price is the use of a standard-deviation or price-percentage function instead of a percentage of the average true range. All the above methods can be easily incorporated into a mechanical system.)
  • Channel Breakout. One of the more popular types of trend-following strategies in the nineties, Donchian originally popularized the concept by employing a breakout of the 4-week high or low. Later, Richard Dennis modified this into the “Turtle System,” which used the 20-day high/low. Most traders don’t realize that simply entering on the breakout of the previous day’s high or low can also be considered a form of channel breakout. (Another popular parameter is the 2-day high or low.)
Exit Strategies: One of the easiest and more popular ways to exit a breakout trade is simply to exit “Market-On-Close. ” The ideal trend day closes near the opposite extreme of the day’s range from the opening. This strategy keeps the trader in the market throughout the day, yet requires no overnight risk. Most breakout strategies actually test out better for trades held overnight because the next opening will so often gap in a favorable direction. Thus, another simple strategy is to exit on the next morning’s opening.

Instead of a strategy based on time, such as the close or the next day’s open, one can also use a price objective. One popular method is to take profits near the previous day’s high or low. One can also determine a target based on the average true range. For the classic market technician, point-and-figure charts can provide a “count” which establishes a price target. This method is valid only if price breaks out of congestion or a well-defined chart formation.

Trade Management: In general when testing volatility breakout systems, the wider the initial money-management stop, the higher the win/loss ratio. With breakout strategies, the initial trade must be given room to breathe.

However, a discretionary day-trader will learn that the best trades move in his favor immediately. In this case, move the stop to breakeven once the trade shows enough profit. The stop can be trailed as the market continues to trend, but not too tightly. Because a great majority of the gains can occur in the last hour as the trend accelerates, try not to exit prematurely.

When trading multiple contracts, scale out of some to ensure a small profit in the event of a reversal. However, do not add to a position: The later the trade is established, the more difficult it is to find a suitable risk point.

A Few Words on Volatility Breakout Systems: Trading a mechanical breakout system can provide invaluable experience. The average net profit for the majority of these systems is quite low, so they may not guarantee a road to riches; but they serve as a terrific vehicle to gain a wealth of experience in a very structured format.

If you are going to trade a mechanical system, you must be willing to enter all trades! It is impossible to know which trades will be winners and which ones losers. Most traders who “pick-and-choose” have a knack for picking the losing trades and missing the really big winners. The hardest trades to take tend to work out the best! With most systems, a majority of the profits come from less than 5% of the trades.

Though most breakout methods have a high initial risk point, their high win/loss ratio makes them easier to trade psychologically. You might get your teeth kicked in on the losers, but, fortunately, big losses do not happen very often. Also, if trading a basket of markets, as one should with a volatility breakout system, diversification should help smooth out the larger losses.

To summarize the main benefits of trading a breakout system:

  •     it teaches proper habits, in that there is always a well-defined stop;
  •     you get lots of practice executing trades;
  •     it teaches the importance of taking every trade;
  •     it teaches respect for the trend.
Additional Considerations when using Breakout Strategies
  •     overall average daily trading range (must be high enough to ensure wide “spread”);
  •     volume and liquidity;
  •     seasonal tendencies (e.g., grains are better markets in spring and summer);
  •     relative strength;
  •     commercial composition.
Quoted from:

Toby Crabel - Definition of Patterns

Toby Crabel wrote a book called Day Trading With Short Term Price Patterns and Opening Range Breakout which is no longer in print and sometimes sold on eBay for more than $1,000. In this book he defines a number of trading patterns which have become popular numbers to calculate and watch among day traders and swing traders. He is a United States self-made millionaire commodities trader. The Financial Times called him "the most well-known trader on the counter-trend side" He is the fund manager of "Crabel Capital Management". ranking number 101 out of 196 funds on Absolute Return magazine list Absolute Return survey of U.S. groups with more than $1 billion AUM, July 2005. This is the latest current ranking of the top 196 money managers in the country. Mr Crabel manages 3.2 billion dollars and had a growth of 16.7% in 2005. A producer of consistent returns whatever the weather, Crabel has avoided having a losing year from 1991 to 2002 (Wikipedia).

Stretch
The Stretch is calculated by taking the 10 day Simple Moving Average (SMA) of the absolute difference between the Open and either the High or Low, whichever difference is smaller.
 
For example, if the Open is 1250, the High is 1258, and the Low is 1240, then we would take the value of 8 for that day because 1258-1250 is 8 which is smaller than 1250-1240 which is 10. We then add together all of these values for the last 10 trading days and divide this by 10 to get the 10 day SMA. This value will then become the Stretch. Stretch Calculation:

1.  Take the Open, High and Low of each day.
2.  Find delta of High - Open.
3.  Find delta of Open - Low.
4.  Which ever is lower between step 1 and step 2 take that value for each day.
5.  Stretch = average of the values of past 10 days.

The Stretch is used in calculating where to enter the trade and where to place a stop using the ORB and ORBP trading strategies. Before buying and selling the Stretch, also consider support and resistance-levels derived from the Daily Classic Pivot Point.















Daily Classic Pivot Points
The formula used in the calculation of Classic Pivot Points are:
 
R4 = R3 + RANGE (same as: PP + RANGE * 3)
R3 = R2 + RANGE (same as: PP + RANGE * 2)
R2 = PP + RANGE
R1 = (2 * PP) - LOW
PP = (HIGH + LOW + CLOSE) / 3
S1 = (2 * PP) - HIGH
S2 = PP - RANGE
S3 = S2 - RANGE (same as: PP - RANGE * 2)
S4 = S3 - RANGE (same as: PP - RANGE * 3)

Where R1 through R4 are Resistance levels 1 to 4, PP is the Pivot Point, S1 through S4 are support levels 1 to 4, RANGE is the High minus the Low of yesterday's daily EOD.

Opening Range Breakout = ORB
Using this strategy, the trader places a buy stop just above the Open price plus the Stretch and a sell stop just below the Open price minus the Stretch. The first stop triggered enters the trader into the trade and the other stop becomes the protective stop.
 
Crabel's research shows that the earlier in the trading session the entry stop is hit the more likely the trade will be profitable at the close. A market movement that kicks off a trend quickly in the current trading session could add significant profit to a trader's position by the close and should be considered for a multi-day trade.
 
The ORB can be utilized as a general indicator of bias every day. Whichever side of the stretch is traded first will indicate bias in that direction for the next two to three hours of the session. This information alone will keep you out of trouble, if nothing else.
 
Multiple contracts can be used when entering on an ORB or ORBP. This allows for some profit taking as the move continues to guarantee at least some profit in the case of a pullback to the break-even stop. A trailing stop is also very effective.
 
If you miss the ORB and early entry occurred, any 3/8 to 1/2 retracement of the established range can be used as an entry point with stops beyond the 5/8 level. This technique can be utilized twice, but becomes treacherous on the third retracement.

Extending Crabel's research results it is obvious that as time passes and we are not filled early on then the risk increases and it becomes prudent to reduce the size of the position during the day. Trades filled towards the end of the day carry the most risk and the later in the day the trade is filled the less likely the trader will want to carry that trade overnight. Variations of this strategy include the Opening Range Breakout Preference (ORBP - HERE).

Opening Range Breakout Preference = ORBP
An ORBP trade is a one sided Opening Range Breakout (ORB) trade. If other technical indicators show a strong trend in one direction then the trader will exercise a "Preference" for the direction in which to trade the ORB trade. A stop to open a position would be placed on the side of the trend only and if filled a protective stop would then be placed. The calculation of where to place the "stop to open" would be the same as that for the ORB trade: For longs, the Open price plus the Stretch and for shorts the Open price minus the Stretch. The ORBP trade is a specialized form of the ORB trade (HERE).  

Narrow Range = NR
If a price bar's Range is less than the previous bar's range it is said to have an NR. The opposite of NR is Wide Spread (WS). NR is technically NR2 when compared to NR4, NR5, and NR7.
Type: Trend-Continuation or Short-Term Breakout Set-up
Conditions: The current bar has the narrowest range (high - low) of the last X bars. The bar may or may not be an inside bar. Buy and Sell reference are the high and low of the NR bar.
 
Narrow Range 4 = NR4
If a price bar's Range is less than the previous 3 bars' ranges (measured independently) it is said to have the narrowest range in 4 days or NR4. The opposite of NR4 is WS4. NR, NR5, and NR7 are also closely watched price patterns.Type: Trend-Continuation or Short-Term Breakout Set-up

Narrow Range 5 = NR5
If a price bar's Range is less than the previous 4 bars' ranges (measured independently) it is said to have the narrowest range in 5 days or NR5. The opposite of NR5 is WS5. NR, NR4, and NR7 are also closely watched price patterns.Type: Trend-Continuation or Short-Term Breakout Set-up

Narrow Range 7 = NR7
If a price bar's Range is less than the previous 6 bars' ranges (measured independently) it is said to have the narrowest range in 7 days or NR7. The opposite of NR7 is WS7. NR, NR4, and NR5 are also closely watched price patterns.
Type: Trend-Continuation or Short-Term Breakout Set-up

Wide Spread = WS
If a price bar's Range is wider than the previous bar's range it is said to have a WS. The opposite of WS is NR. WS is technically WS2 when compared to WS4, WS5, and WS7.
WS4 = Wide Spread 4: If a price bar's Range is wider than the previous 3 bars' ranges (measured independently) it is said to have the widest range in 4 days or WS4. The opposite of WS4 is NR4. WS, WS5, and WS7 are also closely watched price patterns.

Inside Day = ID
If the high of the current day is lower than the high of the previous day AND the low of the current day is higher than the low of the previous day then we have an ID or Inside Day. The opposite to an ID is an Outside Day (OD).  

Type: Trend-Continuation or Short-Term Breakout Set-up.

Outside Day = OD
If the high of the current day is higher than the high of the previous day AND the low of the current day is lower than the low of the previous day then we have an OD or Outside Day. The opposite to an OD is an Inside Day (ID).

Bear Hook

A Bear Hook occurs when you have an NR with the Open less than the previous bar's Low AND the Close greater than the previous bar's Close.

Bull Hook
A Bull Hook occurs when you have an NR with the Open greater than the previous bar's High AND the Close less than the previous bar's Close.

Inside Day Narrow Range 4 = IDnr4
IDnr4 is an Inside Day (ID) with a Narrow Range 4 (NR4).
An IDnr4 is a combination of an ID and an NR4. This happens when the current day's high is lower than the previous day's high AND the current day's low is higher than the previous day's low AND the range is the narrowest when compared to the previous 3 trading days.

See also HERE 

2 Bar Narrow Range = 2BNR
If the 2-day-range (the higher of the 2 highs less the lower of the 2 lows) is the narrowest 2-day-range in the last 20 trading sessions then we are currently sitting on a 2BNR.

3 Bar Narrow Range = 3BNR
If the 3-day-range (the higher of the 3 highs less the lower of the 3 lows) is the narrowest 3-day-range in the last 20 trading sessions then this is true.

4 Bar Narrow Range = 4BNR
If the 4-day-range (the higher of the 4 highs less the lower of the 4 lows) is the narrowest 4-day-range in the last 30 trading sessions then this is true.

8 Bar Narrow Range = 8BNR
If the 8-day-range (the higher of the 8 highs less the lower of the 8 lows) is the narrowest 8-day-range in the last 40 trading sessions then this is true.

Credits: www.mypivots.com

Monday, April 23, 2012

STD Green Week (April 23-27)




































 































Tony Caldaro (link): The decline from last weeks Intermediate wave B at SPX 1393 clearly looks like Intermediate wave C. Thus far, we have had a three wave decline to SPX 1370, which we labeled Minor A. Then a rally to SPX 1387, which we labeled Minor B. Minor C is underway now. As soon as the OEW 1363 pivot range, (1356-1370), fails, the steep part of this declining wave should be underway. We continue to look for a correction low between SPX 1300 and 1340, and ideally between 1313 and 1327. Short term support is at the 1363 pivot and SPX 1340, with resistance at the 1372 and 1386 pivots. Short term momentum is nearly back to neutral after getting extremely oversold.


Francis Bussiere (link): Moon in Capricorn Low near Monday the 23rd?
Moon 20 degree High near Wednesday the 25th?  
Moon in Taurus Low near Monday the 30th?
Moon in Leo High near Monday the 6th?

The dual Moon cycles work best from May to October when they are in phase, and historically this is the weakest period in the market.