The E-Mini Pit
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POST OF THE WEEKEND:
Message #197 from Susan G at Feb 2, 2002 10:58 AM
It's amazing how many countertrends and different patterns are going on on the NQs, just on the 15 and 30 min charts!
That wedge was a beauty Friday am - but only the little one and then we made a higher low. So many different patterns going on! Everyone must be watching the BIG descending wedge, that bullish scenario I mentioned, because there was quite a scurry to cover when it had that false breakout. (Those outer lines on the chart below are the wedge trendlines).
But when it pulled back inside, and then back inside that little rising wedge it set up a great short. But I had my finger on the trigger in case it bounce off that trendline and headed back up. Once it broke the little wedge to the downside, I was much more comfortable being short. This is what I traded. I had to leave for the afternoon at that point or I might have gone long the bounce, as it had a successful reversal after that big slide down.
Here's a chart of the trade and how that wedge was a great setup if the market weakened.
home.earthlink.net
The 30 minute chart does have a possible bearflag forming and I watched it the last 1/2 hour to see if it would break and make a scalp worthwhile. But it sure fought to hold on to that 1530 area and refused to break it. And it kept trying hard to break that overhead double resistance of the two EMAs, and almost did by default as the EMAs were descending. You could just feel how many stops were right above that EMA, and how a few times it spiked through sending shorts scurrying.
So since it was the end of day and everyone was jockeying to get out for the day, I stayed away. I also think if it is a bearflag, and the market has any strength at the open at all Monday, that it will go higher, fake out the shorts and then breakdown around that 1540-43 resistance area that it spike to after 2 pm. What it did for over 2 hours was consolidate right below those EMAs - a dangerous spot to be short unless your buy stop is below the EMAs. Because any break spikes it as people cover, which can give it the push it needs to make it over that resistance. How do I know this? I've done it <g> And had to run like hell to get out.
So now I avoid consolidations like that that refuse to break down. I put buy stops below the consolidation to catch a break down. And there was major selling in the last hour, but it refused to crack that support, a hint of strength. And they were leaning on it from what I could see...
Sunday night will be interesting to watch. On any weakness at all, it may crack that 1530 area.
So here's a few charts of what I'm looking at. Usually bearflags are all higher highs and higher lows, yet this pattern went into a two hour consolidation. The ADX on all time frames is of no help, except it's saying there is a change of trend coming, because it is so low. But which trend? the daily downtrend or the short term afternoon uptrend? Only on the daily is the ADX saying the trend is down, along with the EMA rollover about to happen. But I've learned (actually still fighting to learn) not to anticipate the trend, although the long term trend may be saying down, short term could be up.
And even a short term uptrend can really cause a nice loss in the NQs. I learned that the hard way too <g>
30 min consolidation and potential bearflag
home.earthlink.net
15 min - looks more like a rising wedge
home.earthlink.net
This last chart has my setup ideas for Monday, and shows ALL the different patterns going on:
A consolidation after an uptrend, but below resistance
The consolidation is part of a small symmetrical triangle, which has a 50/50 chance of breaking either way, and often fake out and trap traders.
That triangle and the rising wedge which broke down Friday am are part of a larger descending triangle or wedge
which goes from the highs of Jan 29th through today's high, and the lows of Jan 30th through today's low.
And all of these patterns are trends and countertrends within that huge descending wedge which has been forming since the end of December.
This setup is really just good for the first hour, and by then I'm sure everything will change <g>
home.earthlink.net
And here's another one <g> just spotted while looking at the 15 min with all the patterns - there is also a big RISING wedge which formed in the past three days!! Looks like it will take another day or two to finish forming, if it does at all.
home.earthlink.net
Way too many patterns going on to decide where it's going - but a bunch of potential setups when it does decide. And we are STILL stuck in a 3 month trading range, which the bottom of was tested this week when that early November gap support held. But looking at this chart of the trading range, I think the EMAs may be tipping their hand!
home.earthlink.net
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