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In a message dated 98-07-24 23:48:58 EDT, clydelee@xxxxxxx writes:
<<
Interesting that ONLY 2 OF THESE SWING PROJECTIONS show
a price lower than the low of today and even at that
the projected lows are not significantly lower.
However, only 2 of the 20 project that the turning
point was today. A majority point to a turning some
time next week.
>>
Clyde,
Thanks for the input. I am inclined to agree with you that the turning point
is still a day or two away but the downside is limited at this point.
I have attached a OEX chart that uses the indicators I posted last week.
First let me stress that these are not the only indicators I use for trading
decisions but I thought I would post this chart to give those who asked for
these indicators last week a "feel" on how they can be used/interpreted.
The last swing on the chart is labeled a "5'" . This indicator as I understand
it from Walt Downs who supplied it originally, is a "Swing Counter'" that
uses as a working premise that there are typically 12 to 14 swings of a
designated strength (identified in the indicator) during each Lunar Cyle Phase
of 4 Full moons. (Yellow back to Yellow on the verticle lines.
By the middle of the second lunar month without a swing turn, it was apparent
that one was due. And by the 21st it was confirmed. Note the divergence on
the "acceleration oscillators" that confirmed the trend was running out of
steam.
Could the downturn have been identified and traded with these Indicators?
Only by very disciplined traders because the larger trend was still up as
determined by the moving average indicator.
The best analogy Ii can think of would be to think of any short trades last
week like a running back in football cutting back against the grain to gain
some quick yardage.
Some possible nice yardage but a gain that one would not expect to provide a
touchdown.
The outlook?
Friday's price average is sitting on the lower support level of the moving
average and the acceleration indicators are deeply "oversold" implying that
the price could easily stabilize as this indicator is poised to turn up, but
has not yet done so. So another day or two of downward price action is
possible. Stable price action would also turn these indicators up at this
point.(Side Note: Making trading decisions just any one indicator as it turns
will always lead to disaster.)
In addition, the moving average channel is beginning to flatten out which
typically leads to a trading range, giving less cedence that this is just a
pull back and the upward trend would continue. The channels would need to
turn down and or the moving average would need to stay below the channels for
at least three days before I would call the primary trend as being down.
The low of Friday is very close to the top of the trading range that existed
between April and early June(546-548) so I would expect any downward price
movement to find support at these levels. I do expect these numbers to act as
support for at least a trading bounce into a trading range.
Summing it all up, My vote is would be for a trading range over the next two
weeks.
So i am planning to buy the dips and sell the rallies.
And if the market does surprise us traders, it would be to the upside over the
next two to 4 weeks.
I don't expect to be surprised but will be prepared for it if I am.
That time frame is as far as I go for trading projections as a general rule.
Comments/Observations always appreciated.
Enjoy!
Terry Quinn
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