DOW THEORY !! (REVISED)
Last night I posted some information on another site that has a thread like Silicon Investor.......I felt is extremly valuable to those on this board that are learning.........those of you in my chatroom see the work realtime & I never get into breaking down the trends, I am to busy putting out ideas to trade.........but here its easy as I have time at night & since its friday .....I have time to post this...........below is what I feel to be one of the keys to market timing, when you understand how the 3 trends tie in as one market & traded as three markets, & the synnergy that is between them, your trading & market & trend timing will increase by leaps & bounds....mine has......I post realtime trade setups & put myself out there showing patterns & trade setups all day long for others, so what I discuss isnt after the fact at all......I hope you all gain an education with this & if you need any help......email me .......Have a great weekend..>Chris
Apr 25 Reply to a Post about 3 trends......
Well.......Doesnt the DOW theory talk about the 3 trends ?? I have links below to show all this & some chartwork to help those that do not understand it........
stocktrendwizard.com is link to learn more about the DOW Theory..........
Here is some of my work this week on MER showing a breakdown from a secondary trend reaction back up, bear flag pattern.......
stocktrendwizard.com is the setup.
stocktrendwizard.com shows the step by step follow through of it.......its from my website.....only way for me to show all this completly...
Below is information taken from the DOW theory.........
The Secondary Trend
These are the important reactions that interrupt the progress of prices in the Primary direction. They are the Intermediate declines or "corrections" which occur during Bull Markets, the Intermediate rallies or "recoveries" which occur in Bear Markets
Normally, they retrace from one-third to two-thirds of the gain (or loss, as the case may be) in prices registered in the preceding swing in the Primary direction
The one-third/two-thirds rule is not an unbreakable law; it is simply a statement of probabilities. Most Secondaries are confined within these limits; many of them stop very close to the halfway mark, retracing 50% of the preceding Primary swing; they seldom run less than one-third, but some of them cancel nearly all of it.
APRIL 26th POST..........
3 types of Trends- REALTIME !!
I have more work to show you based on your original post..........
Its so easy to look at the past & talk about what could have happened..........today the DOW Theory & your original post on the 3 trend did come to Life in a great way so that yourself & many others could learn from...........
I left off last night showing what the Secondary Trend on a daily looks like & how it played out for $3.00 + points for our chatroom & MER actually continued lower to 41.30 today...........7 pt move from short setup.......Not Bad for somebody swing trading & looking at a longer term view.........
Today we will look at a lower time frame..........the 60 min time frame & the 5 min chart..........KLAC BRCM MXIM to name a few today had nice 60 min bear flags coming into today, shorts, cannot put it any easier, the secondary trend was on 60 min chart in the direction of the primary trend of the daily which was down..........on my site, you have BRCM, this gave a secondary trend up in the direction of the primary trend which was down on the 60 min time frame. follow me so far ?
See Link Below with BRCM KLAC & MXIM
stocktrendwizard.com
So using this example the Primary trend was the daily BRCM & Secondary trend UP was on 60 min chart.......that was our short setup..........then when the 60 min chart turned down in the direction of the primary trend, this 60 min became the primary trend for new secondary trends on lower time frame and a intermediate trend between the primary ( daily) & minor ( 5 min), the 5 min chart as you see is then a secondary trend in the direction of the primary trend of the 60 min & daily charts.......so your minor trend is 5 min chart, intermediate is 60 min & your primary is your daily chart..........
I am a huge fan of multiple time frame trading & picking & analysis & am very big into work all these time frames as a unit & using the synergy between all of them ............
Here is a tip..........when you have a secondary trend against the direction of the primary trend or also known as a flag pattern.....looking at example of BRCM, you have a nice healthy rally on a short term time frame 5 min that exhausts itself UP into a higher time frame short 60 min,a 1/3-2/3 correction up....... the target for this would be a retest of the prior swing lows for your first target .......more powerful is a KLAC type secondary trend.......no real true reaction up less than 25% that trends sideways as the overall indexes & other stocks give a healthy bounce up........when the other stocks & indexes TURN back into the direction of the primary trend......look what KLAC did ....tanked almost 4 pts INTRADAY !! ......we had it short from am knowing this would be huge breakdown based on this thinking............all the transcripts & charts are layed out for you......SP500 came into today with 60 min chart bear flag & spun off a 30 min flag before showing a huge breakdown into close..
..”A trend will continue in effect until such time as a reversal is defiantly signaled”
Dow Theory...
ATTACHED PLEASE SEE the SP today showing the seconardary trend of a 50% retracemnt up & then equal lenght leg in the
directon of the primary trend
stocktrendwizard.com
Chartwiz |
