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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures

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To: Chip McVickar who wrote (2299)	2/7/2002 11:03:45 PM
From: John Pitera	Read Replies (2) of 12411

Many Thanks Chip, sorry for my long delay to this post, I went to Florida on vacation very shortly after your post. I took a lot of Jan off. The ADX is subtle and I'm not saying it's that special. Wilder's idea was that you want to use trend trading systems such as his Directional Movement system in a market that has a strong trend. A high ADX reading indicates a market in a strong trend. A shorting coming is that a Market that has developed into a strong trend, could likely be due for a significant pullback, so where and how do you enter a trade? One thing I've been seeing with ADX is that when you get a very high reading, and then the ADX starts to roll over and head south, it means you should really be looking around for at least a short intermediate term change in trend. I've found that even if I'm not trading or really using the Directional movement or say a 5 and 21 day EMA crossover, it can be helpful to look at it, over the past 6 weeks, 3, 6 and 12 months just to see what it says in pure numbers. has the market been a trending or a trading range bound market. or done both. The systems gives you hard "quad" numbers that are hard to dispute. ----Very nice work on the BTK index and also on the INDU/SPX. what is standing out to you now? Right now the daily bars on the INDU and SPX/OEX are signaling potential swing top with a two day bar pattern...., it's called the cherry bomb. <smile> Quick Sneakie little pattern most easily seen in the candles. This is also seen in the weekly charts. So it's a heads up period. btw, have you noticed the beautiful "W" pattern on the BTK.X daily and weekly charts. John it's a beauty and is good until 500 is broken cleanly.

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