January 6, 2012 7:50 PM
CMI Description
Combined Market Internals Indicator shows a Combined Market Trend of Internals of $ADV, $DECL, $TICK, $TRIN, $ESINX, XLF, SPY in Real-Time. CMI shows underlying trend in a Histogram. CMI Ribbon shows the detail of internal trends.
Picking tops and bottoms is usually a losing proposition for most traders. I remember doing that with pride (false) of my ability to pick tops/bottoms early in my career. But markets quickly served me with reality and taught me great lessons right in the beginning of my career. Now I use wisdom when I analyze market tops/bottoms and remember my past experiences 
Most wise analysts always say, Market Internals give a Top or Bottom signal far before any of the underlying trading instruments signals. Well, so how do we find which Market Internals and what are these signals?
I use CMI (Combined Market Internals) as my key Market Indicator. It uses 6 Market Breadth instruments and an arbitrage ($ESINX) to compute a complex Mathematical equation to derive a single Market Direction and plot it as a Histogram. I follow this CMI direction as a key resource for my pattern trading. I do not follow any other internals as I think the components I selected for CMI have a great significance in aiding me with finding the market direction.
I have studied CMI for about 4 years now and I think I have a pretty good understanding of how it works. It helps me in finding 1.) Underlying the Market Internals direction, 2. ) The Divergence between CMI and my trading instruments like ES, YM or NQ 3.) A Market Top and Bottom signal when it reaches extreme values in CMI.
Here I will discuss the third point, CMI extremes as signal for Market Tops/Bottoms. Remember my consideration for Market Top or Bottom is on a 5m CMI chart. It is not daily or 60m chart. I am trying to find a temporary Tops/Bottoms in SPX giving me 3-8 points profits during intraday. If I am in a position and I see CMI reached an exhaustion levels, then I take my profits out. Historically I have seldom came across CMI trading above +/- 200 levels. Not sure exactly how 200 level matters, but I noticed when markets start to trade above +/- 150 levels, it has signaled a Top or Bottom (even short-term) for at least 3-8 points.
I have plenty of cases of CMI extremes signaled followed by Market Reversals. On Jan. 05, 2012 was such an opportunity to find a ES Top.
On Jan. 5 markets rallied all morning from a low of 1260 and reached 1278 by 1.30pm ET. I was trading an ABC Bullish pattern and was out of my positions by 1272 level. ES continued its uptrend and rallied to 1278 level. Around 1.30pm, I noticed CMI reached its exhaustion level +150 ((Chart 1). ES price level was also coincided with my pattern exhaustion level 1278. By 2pm, Market internals started to weaken as ES started to trade below CMI 150 level. This provided another trade opportunity for me to short ES from 1275 level. Around 3.45pm, I closed my trade at 1270.5 to net 4.5 points profit in ES. I knew ES may fall
futher down, but I do not want to deal with market closing volatility. ES continued to fall (Chart3) and trade lower in Globex trading.
January 1, 2012 4:58 PM
Hi All,
Thanks for all your wishes.
WE WISH YOU ALL HAPPY AND PROSPEROUS NEW YEAR 2012!!
Sorry could not post in my blog as much as I wished, but I am going
to keep 2012 posts pretty regularly. Have some exciting new concepts I am
working on most of 2011 and I’ll keep you updated on this blog and my main
website: http://www.suriNotes.com
HAPPY NEW YEAR!!!
Regards,
Suri
October 10, 2011 11:15 AM
WEBINAR On Thursday, Oct. 13, 2011 at 4.30pm EDT
As a follow up to the Trading Chart Patterns presentation I gave in June 2011,
I am presenting another FREE webinar, focusing on discussing my current research
on the Advanced ABC Chart patterns and its trading methods.
Register for the webinar:
http://www.bigmiketrading.com/webinars/#registernow
Goto Meeting Link:
https://www3.gotomeeting.com/join/202751110/106311815
The webinar will be on Thursday, Oct. 13th, 2011 at 4.30pm EDT.
My presentation topics include:
* Market Context and its Importance
* Pattern Components like Strength, Location, Size, Symmetry and Clarity
* ABC Patterns and its types
* Trend Quality
* Trading ABCs, Head and Shoulders and Double Top/Bottom Patterns
I will continue to present few other topics in future at BMT. Please request any
specific topics or any other ideas you may want me to discuss , please send an email.
Looking forward to meeting all of you on Thursday, Oct. 13th, 2011 at 4.30pm EDT.
Regards,
Suri
October 2, 2011 11:15 AM
Books on Trading Psychology
Most new traders are never truly prepared for Trading. They focus their entire energy, time and money in learning new Techniques, new Books, new Software etc. Very few traders actually think of the most key important element of trading – Psychology. In the beginning of my trading career, I thought trading is all about Techniques/Analysis and nothing about Psychology. Of course, markets have a funny way of teaching each individual in its own and unique way. I have been trading for over 15 years full-time and now I learnt to respect Psychology as it is one of my favorite interest. During my career, I have taken many courses, classes and read hundreds of books to improve my trading skills, techniques and psychology.
I can attest my trading success to Psychology more than the Trading techniques I learnt or built. To-date I still read Trading Psychology books and maintain and improve my core belief of markets and its trading psychology. I have come to know few Psychology author’s styles which fits my way of thinking. I have gone through a series of methods and meditation to change my psyche to fit the markets. This transformation is really magical and keeps me in check with the reality to achieve my own trading goals.
There are plenty of great Trading Psychology books out there. It is very important to know which author or his style works for your psyche and style. Each trader must focus and pick one or two authors and learn from them and their books/courses etc.
Here is my list highest recommendations for Trading Psychology books. Focus on just ONE or TWO authors and their approaches and books/courses
etc.
1. Ari Kiev (www.arikiev.com)
2. Ruth Barron Roosvelt (www.ruthroosevelt.com)
3. Brett Steenbarger (www.brettsteenbarger.com)
4. Maxwell Maltz (not trading specific, but over-all human psychology)
5. Dr. Doug Hirshhorn (www.drdoug.com)
6. Mark Douglas (www.markdouglas.com)
October 1, 2011 5:01 PM
Hail Mary Pattern Setup
HailMary Setups are rare but when they do occur they are quite reliable. Hail Mary Pass is referred in ‘American Foot Ball’ as very long pass in desperate situations.
Here is my prior post about HailMary with rules on its detection and trading.
http://www.tradechartpatterns.com/?p=512
On Sep. 29th, ES was selling off until late 3pm. I was lucky to find the bearish setup and started shorting every time it reached Mid Band. The last time it reached mid Fib. Band and attempted to close above I started to see the HailMary setup. Around 3.30pm, ES dipped below mid Fib. Band for last time and started to rise. I waited for price to close above the GlobexLow (1141) to confirm the potential HailMary trade setup. Also noticed ES started to ramp up the speed and closed above prev. Low (1143.5). This is a clear sign that ES may be setting up for much higher close. At 4.00pm, ES hit the high of 1157 (near Pivot).
October 1, 2011 10:56 AM
Sorry for not updating my blog as I had many other projects in the last few months… Now
Summer is over and I plan on updating once or twice a day with my new found knowledge
in Pattern research and Trading.
All along, I have been updating both Intraday and EOD
my main website http://www.suriNotes.com
Thank you guys for sending your kind emails to restart blogging.
Regards,
Suri
March 9, 2011 8:57 PM
January 29, 2011 2:11 PM
Tom Demark’s ‘The Bear Case’ video on CNBC.
http://www.cnbc.com/id/15840232/?video=1769284705
SPX’s current 200-SMA is at 1155. It coincides with Tom Demark’s 11% correction prediction. Here is S&P’s bearish Gartley (X5) setup from Friday.
Regards,
Suri
January 24, 2011 8:18 PM
On Jan. 21st, ISRG rallied over $42 to trade at $331. ISRG target (5-6) was $300 (near 200-SMA)
January 12, 2011 2:13 AM
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