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Tuesday, April 10, 2012

WAX ON WAX OFF



Before I get to the post, the above chart of Bonds shows once again we have no orders for tomorrow with the mechanical system. You can see some of the green and red carrots on the chart showing the recent trades it has generated, all winners. However you can also see it does not trade that often. There is no way to trade every day and trade at a high percentage regardless of what any con man might tell you. To be accurate you have to choose your spots. I said I was going to put this at the end of the posts but tonight I got a late start so I decided to put it first.

I will update this post in the morning but wanted to put this out since we are trying to follow these live even though there is not one for Wednesday.

Since our world rises and falls together, we appear to now be in fall mode. The PPT has not saved the last couple of closes surprisingly, maybe Ben has tennis elbow from clicking that mouse at noon every day?




Here we can see the near term support I mentioned broke so short term the trend is now down. From a larger term perspective this is still a wiggle, the real more significant support points are way at the bottom with a minor one being marked on the chart. We have the highest stakes in the history of the country in this election, and the powers that be are not going to want the stock market to have any kind of decline until November is past. If it happens to that will tell us a lot about the underlying forces, if they are able to overpower the government manipulation of the stock market and send it lower. That would be a very dire sign and I don't expect to see that. If he gets 4 more years for people like me at 52, he will do so much damage that we won't recover in my working lifetime. Please if you are against him go out and vote. Please if you are for him stay at home and pass on election night! The one asterisk is that if you are a short seller maybe you should vote for him, he will crush the market eventually with all the things he is doing to ruin the US. I have never seen the markets as difficult to trade as they are now and subscribers of Larry's new service are also seeing evidence of the difficulty of this climate. If he is having trouble how does that bode for the rest of us plebes? One thing we are seeing that is alarming to me is a huge number of outside bars on the charts. I don't know what is causing this other than probably large funds having models that buy and sell above or below them. It is making trading very challenging.

We are in sell the bounce mode at the moment. If by chance we just rocket back up again out of this low point wherever it forms, it would not surprise me in the least bit. However, for the moment most of my short term tools, that quite frankly have not worked with a crap for the last month, are saying to short the bounces.




Here is one market that has been in a huge down trend that I think is setting up to be a buy. Technically we have a couple of higher highs and higher lows here, although this is not exactly a ringing endorsement for a trade. If we were to break out above this trend line I think we could have a good run up. Perhaps we will just fall back down, it would not surprise me, but I just thought I would point out one market that is not a sell the bounce for me right now.

Good Trading



5 comments:

Michael Tredr said...

yup, i've had my eye on coffee too! but yes, it looks to be sell the bounces time. hope the trading day is going well for you!

Anonymous said...

Chris,
Question: Do you see cocoa in a bullish setup?

Comment: RE difficult trading environment & many outside bars - im my view markets are more affectd by hf & algorithmic trading than ever. Most of their strategies are plays against what many traders do. The path between two price points has been nothing but endless short term, seemingly random zig/zag. It's been very frustrating being right on market direction & not make/lose money. I don't expect it to get better in the future. For most small participants trading is exercise in futility at best, at worse it can ruin your life!

Chris Johnston said...

cocoa is not bullish in my view here

as far as the hft I would agree that is probably what is causing the outside bars. You are right about small traders losing money, the good news is that it is a zero sum game so there is money on the floor to pick up from them

Anonymous said...

Thanks Chris- I would consider anybody who is not trading tens of millons dollars account small. I presume that includes you. So them is US.

Chris Johnston said...

yes, I have about a million dollars in my trading accounts, so by that definition I am small also