Importance of Trend Confirmation

November 13, 2012 · Posted in ABC Bullish, SuperBars · Comments Off on Importance of Trend Confirmation 

Market wisdom constantly teaches us “TREND IS FRIEND” and never ignore or counter-trend. Most traders look for trend indications to ride the trend wave.
In Pattern trading, it is most important to trade patterns with the trend for any trading success.

My primary trading methodology is to trade few Geometric patterns (ABCs, Gartleys, DB/DTs, Dragons, H&S/Inv. HS, Breakouts/Breakdowns in the direction of trend with Market Context. One of the aspect of my trading is to wait for TREND confirmation before entering into any pattern trade. Patience and disciplinepays off big if you wait for Trend confirmations before entering into a trade.

On Nov. 12th, 2012, S&P E-minis presented a case for clear trend confirmation into ABC Pattern setups.

Around 10am, I started watching a great ABC Bullish Pattern Setup with Entry Level above 1378 with a STOP at 1376. I patiently waited for it to trigger (Close above EL).
To my surprise, SuperBARS (Trend based Paintbars) is showing continuation of bearish trend even above EL. This tells me that down leg (BC) in ABC Pattern is NOT complete.
I hesitated a bit and removed my bid to buy. ES tried to break above 200-SMA and started drifting lower below 200-SMA with Bearish SuperBar Trend. Once
price closed below ABC Entry (1378), I knew Superbars did indicate further correction into ABC leg and may be forming a potential Double Bottom setup.

I waited patiently for another 90 minutes for ES to complete its Double Bottom setup (still in ABC with C at 94%). Around 11.30am I started seeing GREEN SuperBars
signaling a potential reversal and completion of Double Bottom and ABC Bullish Trade setup.

I entered a Long trade into ABC pattern at 1374.5 with a Stop at 1372.5 (below C). Targets were placed at 1374.5 (+2), 1376.5 (+4) and 1378 (+5.5). Stop was set at -2 points.

Within 90 minutes of time all my targets were hit. Patience and Discipline does pay off and have a great merit in trading.

TRADE Chart

HailMary Setup with ABC Pattern & SuperBars

May 21, 2010 · Posted in ABC Bullish, Fib. Bands, Fibonacci Bands, SuperBars · Comments Off on HailMary Setup with ABC Pattern & SuperBars 

Hail Mary pattern is one of the reliable pattern occurs on a late-day (after 3pm ET) sell-off days.
This pattern may be easily detected and traded using the ABC Bullish pattern rules.
This is also Perfect form of ABC Pattern and can be traded using SuperBars and other pivot levels.

The primary conditions to detect this pattern are:

1. Sell-off in the markets.
2. Fib. Bands show clear resistance at the mid-Fib. Bands for every attempted rally.
3. Price trades outside the lower Fib. Band to mark ‘A’.
4. Price trades above (or near) the mid Fib. Band to mark ‘B’.
5. Price makes another lower-high pivot below the mid-Fib. Band to mark ‘C’ with at least 62% retracement.
6. At least ‘B’, ‘C’ pivots must form after 3pm, if not all ‘A’, ‘B’ and ‘C’ pivots form after 3pm ET.
7. Trade using ABC Bullish pattern rules.
8. After triggering an entry, the price trades at accelerated pace, hence the Targets are reached quickly.
9. Must exit the trade by close of the day.


Here is today’s Hail Mary Setup in @ES.

After trading a high of 1088.75 by mid-day, ES started to sell-off. Every attempted rally met
with resistance at the mid-Fib. Band area. Around 3pm, price traded again outside the lower
Fib. Band to mark the ‘A’ pivot at 1068 level. This level was also supported by Value Area
Low (1068.5) and Previous Low (1067.25). About 3.30pm, price attempted to rally above
the mid-Fib. Band (1075.25) and quickly retraced back into the AB leg. At 3.40pm, the price retraced
over 62% and marked ‘C’ pivot to complete ‘ABC Bullish’ pattern. This ABC is also a perfect ABC Setup.
ABC Entry was set above 1071.5. At 3.44pm, price crossed EL with a strong Green SuperBar to signal
a potential ‘Hail Mary’ setup. Stop was set at 1069 with Target levels (62%, 100%, 162% of AB levels:
1073.75, 1076.5, 1081.).

ABC Bullish
Fib. Bands

Perfect ABC with SuperBars

March 15, 2010 · Posted in ABC Bullish, Fib. Bands, SuperBars · Comments Off on Perfect ABC with SuperBars 

This morning S&P Emini futures sold-off from the high of 1152 to 1136 level. Around 11.30am, @ES traded outside the extreme Fib. bands near 1136 and reversed its down-trend inside the Fib. bands. After lunch hour, @ES traded above the mid-Fib. Bands (1140.75) to form ‘B’ pivot and retraced below the Fib. Bands to signal formation of ABC Bullish pattern. The ‘C’ retracement (59%) was below the mid Fib. Band to confirm Perfect ABC pattern. The Entry Level for this Perfect ABC was at 1139.75. Price closing above the EL with a strong Green SuperBar and above the mid-Fib. Band signaled a clear entry into Perfect ABC around 1140.25. A Stop loss was placed around 1138 to protect the trade. Strong SuperBars suggested higher targets into this ABC Pattern as 100%AB was set 1142.5 and 162%AB at 1145.25.

ABCSuperBars_Mar1510

ABC Bullish
Fib. Bands

Confluence of Price Levels

January 27, 2010 · Posted in ABC Bullish, CMI, Globex Pivots, SuperBars · Comments Off on Confluence of Price Levels 

Jan. 26, 2010

Price confluence is an amazing phenomenon. Today many price levels were confluencing to suggest the key targets and reversals. This morning produced a great ABC Bullish pattern with an entry level near 1087.5. Although not a perfect ABC to trade, it is one of my favorite as it showed its strength right at the open. Once this ABC started to trade above the Mid-Fib. Bands (1088.75), a solid entry is confirmed. I was also looking at the Fib. Zone Pivots for potential target to the upside…. Fib. Zone Pivots were placing today’s target in the area of 1100 to 1102.5. Note pHi is at 1099.5. The confluence of these levels may be the target for the day.

Here is the Intraday TradeBlog:
http://www.surinotes.com/index.cfm?CSEL=1001&pDate=20100126

Around 10am, ABC Bull started to take-off and reached the 1st target: 1092.75 (62%). The next target would be 100%AB at 1097. (See my 10.07am chart).
At 10.22am, ES reached Globex High and started to retrace 3 points (See 10.30am chart).
At 11.42am, ES started to rise and head towards the defined Fib. Zone Target (1100) while respecting the VAH, POC, pHi Levels…
At 12.48am, ES reached the Fib. Zone Target of 1100 and showed signs of reversals. This was also evident in CMI 5m chart as CMI
showed significant Divergence at 1100 level.
By 4pm, ES sold off from 1100 levels to reach 1086.

ABC Bullish
$ES_Jan261017

Fib. Zone Levels
ES610_Jan261018

End of Day Sell off
ES1220_Jan2610

ABC Bullish
Fib. Bands
Globex Pivots
Fib. Zone Pivots
CMI

S&P’s Weekly Analysis

January 24, 2010 · Posted in SuperBars · Comments Off on S&P’s Weekly Analysis 

Jan. 24, 2010

S&P made a Swing high of 1576 in October 2008 and a Swing Low of 666 in March 2009. S&P closed at 1091 on Friday, Jan. 22nd. Friday’s Close is just below the 50% level of the range from 2008’s SwingHigh and 2009’s Swing Low. There were two major trend-cycles in 2009. The first cycle started in late March 2009 and the second upcylce started in 3rd week of July 2009. Both these cycles are shown by the SuperBars. Last week’s decline did not deter the up trend as price prints green SuperBars. A close below 1030 or so may trigger the SuperTrend to turn pre-bearish to Bearish signal. Most bounces/rises from the sharp sell-off are either very shallow (< 38% bounce) or strong (>=62%) of prior swings. If the up trend is not broken in the next few days, S&P’s next target may be 1228-1250 area in the next few weeks.

Pl. see my Jan. 17th Price and Time Confluence post for downside targets if the downtrend continues.

SPX_Weekly

Symmetric Triangle Failure

January 22, 2010 · Posted in Failed Chart Patterns, Fib. Bands, Globex Pivots, SuperBars, Symm. Triangles · Comments Off on Symmetric Triangle Failure 

Jan. 21, 2010

Symmetric Triangles are continuation patterns and are very reliable. Very rarely (<20%) I have seen failures in Symm. Triangles. Today's @ES showed a methodical failure in Symm. Triangle pattern. Overnight trading range (Globex) was up as it traded Globex high of 1139.25 to Globex low of 1130.75. At the open, ES was trading near the Globex Mid level (1135). A series of Lower-High swings and Higher-Low Swings prices formed the Symmetric Triangle pattern. My first assumption was to trade the pattern from long side as trendline breakout above GBXHi: 1139.25. The prior trend before formation of the pattern is in uptrend. 4th swing in the Symm. Triangle was marked around 1132. Once price trades below the 4th swing point, it confirms the Failure of Symm. Triangle. Around 10.15am, price closed below 1132 triggering a Short and confirming the Symm. Failure. The Stop is set above the GBXMid and VAH: 1135. The range (SIZE) of the Symm. Triangle (1 to 2) is about 10 points. This is the target size from the breakdown level below 4 to 1122. SymmTriangleFailure_Jan2110

S&P Price and Time Confluence Update

January 21, 2010 · Posted in ABC Bullish, SuperBars · Comments Off on S&P Price and Time Confluence Update 

Jan. 21, 2010

$SPX.X fell 21.5 points today on Obama’s plan to restrict banks and financial institutions trading activities. SPX also may be showing signs of reversal as it trades near the 100%AB level (1158.75) and key turning date Jan. 19th. Jan. 19th marks the 200% of the ABC Major Cycle from July 8, 2009. If SPX continues its correction, the targets may be 62% (1048) and 1000 levels. SuperBars also signaling first Orange (pre-bearish) bar to start of Bear trend.
SPX_PriceTimeConfluence2_Jan2110

ABC Bullish
Fib. Bands

Gold ABC Bear Update…

January 20, 2010 · Posted in ABC Bearish, SuperBars · Comments Off on Gold ABC Bear Update… 

Jan. 20, 2010

After a series of Up/Down swing days, Gold is finally confirming its ABC Bear Entry Setup as it trades below (EL) 1128 level. I also would like to see a Strong Bearish (RED) SuperBar for further confirmation. The potential targets for the ABC Bear are 62% (1067), 100% (1009).

Gold_ABCBear_Jan2010

ABC Bearish

Trade Log: Jan. 15, 2010

January 17, 2010 · Posted in ABC Bearish, ABC Bullish, Globex Pivots, Market Structures, SuperBars · Comments Off on Trade Log: Jan. 15, 2010 

On Friday, another ABC Bearish pattern emerged from the overnight Globex high (1147.25) to the Globex Low (1137.5). Both Globex High and Globex Low were also marked as Market Structures (MSH and MSL) patterns. At the market open, ES retraced 66% into the AB to mark ‘C’ (1144) pivot and completed an ABC Bearish Pattern. A Close below 200-SMA and EL (1142.75) produced a Sell signal into AB pattern. Targets were: 1138 at 62%, 1134 at 100% and 1128.25 at 162%.

Around lunch time, ES reached its 162% AB Target: 1127.5..
Another ABC Bullish (BLACK, small range) pattern also reached its near-term target (100% AB): 1131.75

TradeLog_Jan1510

ABCBear_Blog_Jan1510

ABC Bullish
Globex Pivots
Market Structures

Price and Time Confluence??

January 17, 2010 · Posted in ABC Bullish, Head and Shoulders, SuperBars · 2 Comments 

Jan. 17, 2010

Precise Price and Time-Cycle Confluences are very rare. When they do occur, they tend to influence the outcome very strongly. Here is a scenario in S&P Index where price and time-cycles may be in line for confluence.

$SPX made a low of 666.79 on 03/06/09 (influenced by Number 3? :) and rallied pretty much in a steep run up. Every analyst ever said this is it, its going to turn and fall below March lows’ was thrashed and proven wrong. A brief retracement in June-July ’09 to 200-SMA followed by much publicized H&S pattern (failure) produced another strong rally. This ABC bullish is NOT a Perfect ABC. C retracement is very shallow. Neverthless, it is now coinciding with its first Time-Influenced Cycle (twice the size) with its Price Target. 200% of Time Cycle is on Jan. 19, 2010 and 100% of AB Target is set 1158.78. Near confluence?

Historically these confluences influenced some retracement. Last week’s trading has shown some signs of pullback. Fridays’ Options expiration, holiday weekend may have triggered sell-off. I would be interested in some pullback to test 62% level at least (1048) for another trend up. But I could be wrong like most analysts last year :)

SPX_PriceTimeConfluence

Checkout SuperBars… They never strongly showed RED bars since July 2010..


ABC Bullish