Originally Posted June 7, 2009
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Wednesday, June 10, 2009
AAPL 10 Minute Chart-June 5, 2009
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I have included a 10 minute chart which better shows the advance towards the time and price confluence. In retrospect it would of been a great trade to buy Apple at the open Monday following my recommendation, then sell the position June 4 or 5. Since we earlier established that time and price confluence is used in addition to an already existing trading program, this chart provides necessary information about execution. From a day-traders perspective how valuable was the analysis I provided? You would have avoided short-selling and looked for long momentum plays. Opening orders obviously provided the best opportunity, but again that is retrospect. Also, you would be looking to possibly get short at the recommended sell price. This is because it is expected to be a "reaction level". This is better judged if you have experience with level 2, NYSE specialist, or Nasdaq level 2 automated programs. From a position trade, there was much more opportunity. You could have held the equity throughout the week with an intention to sell based on date or price. Or you could have bought out of the money (or ITM) June call options @ or above the $140 (or higher based on buying power) level. Depending upon the price of delta, OTM or ITM options will provide different returns especially since you are buying a contract within the expiration month.
Pay close attention to the intraday price reaction to the red and green trendlines. Keep in mind that these are the same trendlines that are drawn on the daily charts.
Pay close attention to the intraday price reaction to the red and green trendlines. Keep in mind that these are the same trendlines that are drawn on the daily charts.
AAPL Daily Chart Update
AAPL Daily Chart Update June 5, 2009
The 145.97 target was met June 5th. This has been a successful example of time and price confluence which I originally learned from a book written by Constance Brown. This book is titled "Technical Analysis for the Trading Professional". The second factor included in the analysis is the Elliott Wave formation. If the count and Fibonacci projection are actually "reactive" then we should see progressively lower price action for the week ahead.
INDU Intraday Chart Update- 15 Min
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Tuesday June 2 was the first day that price tested the projected resistance level. This is a 15 minute interval of the INDU which better shows the price action. The pullback following the test was good for about 170 points. In the days following, price rebounded back to the resistance level. For some reason, the intraday closing price at the end of Friday shows a slightly different price than that of the daily charts.
INDU Daily Target Update
June 7, 2009 Update- Daily Chart
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It appears as though the resistance level for the Dow has been confirmed. The weekly closing price was the lower resistance target of 8763.
Sunday, June 7, 2009
Divergence Charts & Cycle Analysis
REIT's VS U.S BANKS INDEX (DJUSBK)
--------------------------------------------------- NASDAQ VS U.S INSURANCE INDEX (DJUSIR)
NASDAQ VS U.S BANK INDEX (DJUSBK)
The divergence which is occurring within these charts point towards upcoming weakness that we will see within the broader markets. These charts illustrate that the banking sector acts as a leading indicator for the rest of the market.--------------------------------------
Sector Cycle Rotation Analysis
(Leading, Middle & Laggard Groups Determined by Martin Pring)
June 07, 2009
The liquidity driven industry group; namely home construction and telecommunications which have not completed a final leg down (Mar 9 double bottom), have lagged in the recent rebound instead of living up to their reputation as leaders. Most notable is the performance of the Dow Jones U.S Restaurants & Bars Index (DJUSRU) which has rebounded 40% from the November 08 low and is only 17% below its all time high. When compared to the performance of technology (touted by media as being the top investment) we find that the Dow Jones U.S Technology Index (DJUSTC) is up 50% from its November low but still 51% below its all time high. On the other hand, liquidity driven industries which have completed a final capitulation low yet still rebounded less than its group category peers include airlines and utilities.
The middle cycle groups which tend to have their best performance half way through a bull market move have had a stronger rebound than that of the envisioned "leaders". The middle category includes retailers, manufacturers, healthcare and consumer durables. Better yet is the performance of the usually "lagging leaders" which include technology, commodities and commodity related equities. Contrary to the conventional business cycle, these late cycle leaders actually began the broader market recovery. Unlike the "leaders" which are liquidity driven, these "laggards" are earnings driven. With that in mind, it can be concluded that the recovery thus far has been driven by earnings rather than additional liquidity. This rally should have considerable difficulty being sustained after the speculation surrounding P/E ratios subsides.
Friday, June 5, 2009
Monday, June 1, 2009
ADI Weekly and Daily Chart Analysis
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ADI WEEKLY CHART
This is a great example of how computer screen "pixels" or resolution can change what we see on charts. Take a look at points "X" and "Y" on both the weekly and daily charts. The blue line on the daily chart clearly acts as a good indication of price resistance and support. When we take a look at points "X" and "Y" on the the weekly chart, it looks as though it could be redrawn in order to give a better example of support and resistance. At first glance it seems difficult to believe that this could be the same line in each chart, but that is how computer resolution can change the appearance of technical indicators as time frame is lengthened from a daily to weekly time frame.
ADSK 5TH Wave - Weekly Chart
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This chart shows several possible inflection levels. My short trade will be signalled if price reaches 25.40 during the week that June 9th occurs.
ADBE Weekly Chart
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This weekly chart of ADBE shows the possibility of a 5th wave decline. There is currently a weekly close above the 38% ret level so it seems unlikely that it will hold at this point. It is much better to wait until the 50% level is tested before short positions are entered.CME Group -Daily Chart
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It looks as though the CME equity is currently going to end its wave cycle. With wave 5 being extended, it is difficult for me to interpret where it is going to end. I am able to measure a Fibonacci extension target which projects a short term top at $322. The first target for the decline is $283 (38.2% ret). These regression lines have also been drawn without the assistance of a regression tool.INDU Daily Target Including Update
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The Dow has an 8763-8772 inflection high target. It is expected that this target should put in a short term high in the DOW. The wave count determines that wave iv of III will be complete at this level. It is expected that a decline should follow the projected rally up to 8772. This decline is not expected to fall below 7500.
AMGN Triangle Breakout
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Note- All the uptrending and downtrending lines (colour red) are geometrically parallel to each other and have been drawn without the assistance of a regression tool.
AAPL Daily-Chart Analysis
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The regression lines that are drawn in this chart have been drawn without the assistance of a regression tool. Following the 145.97 inflection it is expected that price should decline back to the $120 level in order to test the 38.2% retracement low.
MMM Time Analysis #1
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There will be 4 charts of MMM included in this posting series. The following analysis is being completed with the knowledge learned from a book written by Constance Brown, entitled "Technical Analysis for the Trading Professional. The author has discovered that time and price (here-after referred to as T&P) have an amazing confluence which can provide insight into different trading techniques. Naturally it would be unwise to trade from the T&P signal alone. However, when used as a component of a trading program, T&P analysis can assist with determining dates of superior importance. Three of the following four charts will provide analysis on historical price action in order to assist if you choose to apply it yourself. With the remaining chart I will attempt to determine a future T&P confluence. This forecast will be updated.
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