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Hello Adam!
Enjoyed the charts. Am reminded when reading your posts on the
difference between analysis and trading. It's seems the
conclusions I've come to about this are best translated into what I
think is the difference between a signal and a trigger. A signal
may tell me things about the bigger picture that might give me
comfort to the trade, or provide further background, but it might
not be the best place to take a position. On the other hand, the
snap back reversal of 4 days ago in the s&p (which your charts don't
show because they incorporate all session pricing as opposed to
pit-session only), was a gimmie for me as a trade trigger. It
wasn't till it broke into a new low that this highly profitable
trade confirmed my suspicions about the bigger trend. But if I
needed those confirmations to have taken the trade before hand, I
never would have been short. Now that this low and support point
has been taken out, I'm on alert to a reversal. And this despite
the Signals are all saying the trend is now more clearly down.
It's not that break downs from h&s necklines can't work as triggers
too, but I'd hate to be risking real equity to find out so late in
the trade.
And thanks for reminding me of Murphy's rules regarding validation
of this kind of break out. That will surely help us all, whether
just getting in, or trying to decide whether to cover and run.
One more note regarding the same subject: I also find that using
the continuation charts helps me get the big picture thing, but I'd
never trust making trade decisions off them. In other words, if
the signal is not in the current contract I'm trading, I find it a
risky stretch of faith to rationalize the trade by what I see in the
continuous contract.
An interesting example that caution can be seen between the March
Sugar contract and the Sugar continuation chart. It's tempting to
be selling the "break" of a neckline in the continuation chart, but
the corrective nature of the current sugar decline in the March
contract suggests the short trade has little life left in it and
could culminate in a rapid reversal to new contract highs after such
a breakdown. In other words, the break might be only good for a
day trade in the March contract, even though such a break in the
continuous contract suggests much bigger things below.
Scheier
vonhef wrote:
> Well, as most of you have probably noticed, the S&P 500 has
> dropped below the neck-line.In the classic technical analysis this
> is a very bearish signal. My long term trend has alsoturned down
> today......this is the first time since October of 98.As
> always....comments welcome. Adam Hefner
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Hello Adam!
<p>Enjoyed the charts. Am reminded when reading your posts
on the difference between analysis and trading. It's seems
the conclusions I've come to about this are best translated into what I
think is the difference between a signal and a trigger. A signal
may tell me things about the bigger picture that might give me comfort
to the trade, or provide further background, but it might not be the best
place to take a position. On the other hand, the snap back
reversal of 4 days ago in the s&p (which your charts don't show because
they incorporate all session pricing as opposed to pit-session only), was
a gimmie for me as a trade trigger. It wasn't till it broke
into a new low that this highly profitable trade confirmed my suspicions
about the bigger trend. But if I needed those confirmations
to have taken the trade before hand, I never would have been short.
Now that this low and support point has been taken out, I'm on alert to
a reversal. And this despite the Signals are all saying the
trend is now more clearly down.
<p>It's not that break downs from h&s necklines can't work as triggers
too, but I'd hate to be risking real equity to find out so late in the
trade.
<p>And thanks for reminding me of Murphy's rules regarding validation of
this kind of break out. That will surely help us all, whether
just getting in, or trying to decide whether to cover and run.
<p>One more note regarding the same subject: I also find that
using the continuation charts helps me get the big picture thing, but I'd
never trust making trade decisions off them. In other words,
if the signal is not in the current contract I'm trading, I find it a risky
stretch of faith to rationalize the trade by what I see in the continuous
contract.
<p>An interesting example that caution can be seen between the March Sugar
contract and the Sugar continuation chart. It's tempting to
be selling the "break" of a neckline in the continuation chart, but the
corrective nature of the current sugar decline in the March contract
suggests the short trade has little life left in it and could culminate
in a rapid reversal to new contract highs after such a breakdown.
In other words, the break might be only good for a day trade in the March
contract, even though such a break in the continuous contract suggests
much bigger things below.
<p>Scheier
<br>
<p>vonhef wrote:
<blockquote TYPE=CITE><style></style>
<font face="Arial"><font size=-1>Well,
as most of you have probably noticed, the S&P 500 has dropped below
the neck-line.</font></font><font face="Arial"><font size=-1>In the classic
technical analysis this is a very bearish signal. My long term trend has
also</font></font><font face="Arial"><font size=-1>turned down today......this
is the first time since October of 98.</font></font><font face="Arial"><font size=-1>As
always....comments welcome.</font></font><font face="Arial"><font size=-1>
Adam Hefner</font></font> <img SRC="cid:part1.3808F37D.D06A5619@xxxxxxxxx"; ALT="" BORDER=0 ></blockquote>
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