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Using price action and not fighting the trend works great for me as well. I
have noticed that when the S&P's take off the the upside (Overbalance in
Price and Time) and can only retrace to the 38% level, that indicates
strength and I want to be buying a breakout.
Have a good weekend.
-----Original Message-----
From: steven poser <swp@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, October 30, 1998 2:05 PM
Subject: Re: sp500 update
>EXACTLY CORRECTUMUNDO!!
>
>Earl Adamy wrote:
>>
>> Putting things in perspective, I'm a discretionary trader whether day
>> trading or position trading so I'm not following a fixed set of rules
which
>> says divergence = buy/sell. Divergences can last a long time e.g. the
entire
>> rally into the July highs was a divergence from the April highs. When I
see
>> divergences, I add the information to the weight of evidence I use to
>> evaluate the price action and my trading time frame, however I use the
price
>> action to define the trend and I do not fight that trend. Going into this
>> morning we had good breadth and strong upward price action with little
>> evidence of selling pressure (in spite of volume and McOsc divergences)
so I
>> looked for trades on the long side rather than the short side. The
>> divergences told me not to hang in for the last dollar, so when my price
>> objective was hit, I got out. As I'm writing this, the price action
appears
>> to be weakening but I'm not about to go short until the price action
>> confirms the other divergences. Hope this helps.
>>
>> Earl
>>
>> -----Original Message-----
>> From: ken weiner <traderksw@xxxxxxxxxxxxxxxx>
>> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>> Date: Friday, October 30, 1998 12:22 PM
>> Subject: Re: sp500 update
>>
>> >Earl, Ben
>> > Granted that there is negative divergence in the McOsc, but given the
>> >seemingly characterisic lengthy lag times for response of prices (weeks
to
>> >months - at least from recent historical examples) wherein lies the
value
>> of
>> >this divergence as a timing tool in the immediate present/future?
>> > Or, alternatively, are you guys viewing this divergence as an enabling
>> >indicator which sets the stage for the directional move which you don't
>> act
>> >on unless and until your proprietary triggering indicators (which I
trust
>> >you will share with the RT brotherhood before Gary makes his next
>> prediction
>> >or Slick Willie is re-elected) signal the exact timing of an entry.
>> > Pearls of wisdom appreciated by all, Ken
>> >
>
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