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J,
Thanks for the comments. Actually the market performed more bearish than I
had anticipated
today....completely missing my entry point and opening much lower.
You wrote:
"As for May of this year, I'm getting one of those bright green bars that
denotes a bull trend."
The May bar on a monthly chart is dynamic and wont be complete until June 1,
so the bar
using my "expert" can change colors before the month is finished (in fact it
did change from bright
green to dark red just from Wednesday's movement, but could end the month
green who knows?).
Let me further explain how I am doing my analysis...As I analyze a monthly
chart, I first look at the
market condition of the most recent completed bar. What do I mean by
completed? For the S&P
that would be the April bar....since May is not finished yet. On the S&P
monthly, the last bar that
was a "Trending Bar" was Jan 2000, so the market has been in congestion (on
a monthly level) since
the first of the year. Why do I wish to know this? Because my trading rules
change depending on
market action. In trending markets, you trade with the TREND...in congesting
markets,
the DIRECTION.
To explain further about market direction....let me delve further into my
analysis of the monthly
chart. I know that one thing is certain for every monthly bar....it MUST
have a high, low, and close!
You say: So big deal! Well if it MUST have these things, my next question
is: Has it formed a High?
Has it formed a Low? My answer to the first question on the S&P was: "maybe,
maybe not."
My answer to the low was a more confident "I don't think so". So I had
concluded that the S&P
May bar has yet to form the monthly low, meaning immediate market DIRECTION
is down.
So I would trade short, while monitoring my short position viewing the daily
bars, exiting the short
when the daily shows a sign of bottoming and possibly reversing position to
go long and ride the
DIRECTION up to form the monthly high. Of course the determining factor to
reverse and go
long is dependent on other rules.
Yes J, the historical trend of the S&P is up.....but as you can see I was
analyzing imminent
monthly moves, and if I had executed my entry strategy better....could have
made a pretty
penny today<g>
Also, the "Gann HiLo" was developed for a different analysis method than I
am currently
using, so I am not using it at the moment.. I am not saying it is
bad.....just a different technique.
Adam
----- Original Message -----
From: "j seed" <jseed_10@xxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Wednesday, May 03, 2000 8:59 AM
Subject: Re: (Market) S&P analysis critique
> Adam,
> In theory I agree with your accessment of the market. In principle I'd
have
> to wave a big flag. Here's why; I took a look at the monthly, weekly, and
> daily bars of the S&P. When I looked at the monthly and zoomed out to
> capture all the way back to 1996, I saw a bullish trend. This is also
> confirmed by applying the trend expert you sent. This then is where I
would
> disagree. Aug., Sep., and Oct. of '98 were bearish with a drop below the
> Gann HiLo. Now if my memory serves me correctly I can remember a whole lot
> of people crying about that time. Came close again in Jul., Aug., and Sep.
> of '99 but never went below the Gann HiLo...just some congestion. As for
May
> of this year, I'm getting one of those bright green bars that denotes a
bull
> trend.
>
> Now when I switch to weekly bars and zoom in to capture all the way back
to
> Jul. of '98, the picture changes dramatically. Jul.'98 ushered in a
bearish
> trend which consolidated and corrected to bullish in Sep. and Oct. of '98.
> Moving forward to '00, I see another bear trend that began in the last
week
> of Jan. and ended in the last week of Feb. We then had some consolidation
> and finally broke out in the second week of March. Next, we had 4 nice
> bullish weeks and have finally entered into another period of bearish
> consolidation. Okay, I'm just about ready for CNBC!
>
> Finally, lets switch to the daily chart still using your expert. I'm
> displaying all the way back to Feb.,'00 and see that on Mar. 29th we
entered
> into a bearish trend with some consolidation until April 19th when the
> market broke above the Gann HiLo and went bullish until yesterday, 5-29.
We
> have now dropped below our Gann HiLo and are again in bearish territory.
> This is a consolidation bar and not a trend which could mean that we may
> again turn bullish (sounds like Bill Williams huh). If I were going to
play
> this market bearish I'd probably wait for a confirming bear trend bar
which
> should occur at the 1415 mark.
>
> One final point that I would make and that is that none of this would have
> been possible without the expert or the Gann HiLo that you so graciously
> offered. I can only say, THANKS. It's one helluva system for analysis!
>
> J.
>
> >From: "Adam Hefner" <vonhef@xxxxxxxxxxxx>
> >Reply-To: metastock@xxxxxxxxxxxxx
> >To: <metastock@xxxxxxxxxxxxx>
> >Subject: (Market) S&P analysis part2
> >Date: Tue, 2 May 2000 22:52:18 -0500
> >
> >Now that I have my basic direction determined from the monthly,
> >lets analyze the daily bars: I was noticing over the week-end that
> >the daily bars had retrace to the 61.8% line and entered into congestion.
> >This congestion suggest a possible reverse from the up move since mid
> >April. Monday's close below the lower confines of congestion (around
1458)
> >further strengthens my monthly analysis of downward movement.
> > Well..now that I have an analysis...how to trade? Well It looks like a
> >good
> >sell level would be at 1464. with the protection stop around 1495. The
> >calculated risk on the protection is 31 points and the calculated
projected
> >low is around 1350 (100 points). Of course analysis can be wrong, in
> >several
> >ways. My entry point could be missed and I may not get into the market,
or
> >the market may reverse tomorrow and blow-up my sell.
> >Regardless..this is NOT a recommendation, only an exercise for you to
> >critique.
> >
>
> ________________________________________________________________________
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>
>
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