BACK TO BASICS

Yeah, blog is back.  Due to issues with blogger, we were unable to post Thursday's review.  Here it is...


TODAY:

Yesterday was a trend day, yet the majority of trades were counter trend.  Nothing wrong with CT, as it is a trade.  But the trend was a trade too.

Today we went back to basics.  Look for, and possible trade the element breakouts (BO).  Elements are any item you add to a chart to help provide an edge, or some clue as to what the market is attempting to do..  This can include channels, TL's, MA's, BO Targets, etc.  Some traders will use a calculated measured move. or use fib values, and a variety of indicators and/or studies.  If it seems to work for you, use it.  It has been our experience that simple can work too.

ES:

The ES began the day in an upward bullish channel (#1). As we have indicated, the global setting is preferred over the rth at the open, but there is no difference after a few candles.   #2 is the BO Targets, the resistance at 1335, a key level, and at 31.5 the support.

With the global,we see a failed BO (FBO) of the channel.  B1 is a reversal, but you would not read that with a rth chart.  34.75 becomes the short.  A FBO and a cross of an element.  The more elements involved in a move, the stronger the evidence is for the trade.  Even if you waited for the lower target BO,  profit available.

For rth traders, b4 becomes the first reversal (ours was b1).  Since it failed to break the lower target, and given the resistance above (channel and EMA), it was not considered.  By b22, the churning was over, and the long was a go, as was the EMA hold at b33-34.

A new consolidation (#5) developed, and a long BO was at b42.  #6 was a narrow wedge off b42, which was a short into the red zone marked at b50-52, and hit on b67.


6E:

6E was in a similar global pattern.  We see a run in price from the support of a bullish TL (#1).  The upper BO Target was set at the failed test of 4200.  B1 becomes the reversal for the shorts going into the EMA.  The TL hold at b4 was your long signal.  This was a reversal for rth charts.

The second attempt at 4200 was another long signal,as was each EMA touch.  TL #2 and BO #2 helped defined the trades off the EMA. B35 was at the #2 TL and was a long entry.

 The bull weakened, and formed a lower high at #3.  This was a red flag.  We did not jump into the next trade at the EMA (#4), but waited for the #3 TL break.  It was an excellent run into resistance around 4265.  This failure (note the declining wicks) and the double element break at #5 (#2 TL and EMA) was an excellent short.

Day is done.