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| travlr 80 posts msg #31920 - Ignore travlr |
4/28/2004 10:16:17 PM Hey Zuber, I have noticed that you place most (all?) of your support/resistance emphasis on TL's and MA's. I don't remember (with out reviewing) you ever mentioning price zone support/resistance levels, which struck me this evening. I have noticed that a lot analytical traders, such as your self, who pay attention to more of a Wykoff style of analysis, seem to place more of an emphasis on these "price zones" and volume there in. Although they do, naturally, pay attention to the TL's and MA's as well, they seem to prioritize the zones. Having respect for your methods of analysis, I wonder if you might comment on your experience with these price levels of support and resistance. Thanks. Have fun with your new piece of hardware. travlr |
| EWZuber 1,373 posts msg #31924 - Ignore EWZuber |
4/29/2004 4:49:45 AM travlr Good point. Price does play an important role in chart analysis. Its important to look at the price at cycle tops and bottoms in all time frames as support and resistance. You may have noticed that the stochastic cycle top on the long term Monthly Charts has coincided with resistance at the highs NASDAQ made back in Jan. of 2002. We'll see this come into play more often now that the market has made a Long term Monthly Chart cycle top and dropped below that cycle high. When the next long term accumulation phase begins we will be seeing stocks rising into this resistance. There is an area of congestion, near term, at between about 2075 and 2154. I think this TL support we are testing now is very important because this trendline on the .COMP Daily Chart is part of an inverted Head and Shoulders pattern. Its a basing pattern that is forming after testing long term price resistance. If the Trendline holds it will confirm the H&S pattern as bullish. JMHO |
| EWZuber 1,373 posts msg #31925 - Ignore EWZuber |
4/29/2004 11:42:48 AM NASDAQ rose to test the trendline as resistance this morning now at 1993. So far it has broken above it but failed to confirm on a test of support. Still a few hours left within this Hourly chart accumulation phase. 5 Min. chart is oversold now and about to move higher to test todays intraday high at 1998. Market is trying to establish a short term uptrend on the 5 min chart. JMHO |
| EWZuber 1,373 posts msg #31929 - Ignore EWZuber |
4/29/2004 2:47:39 PM NASDAQ tested the Supporting TL at 1992 as resistance and confirmed. It dropped precipitously from there and now is testing the Supporting TL at 1958. It broke through and will have to see where it closes this session. Sim. puts are kicking butt. Up another 40% & 62 % today. |
| EWZuber 1,373 posts msg #31931 - Ignore EWZuber |
4/29/2004 7:14:56 PM Sim QQQ puts closed todays session May 36 @ +122% May 35 @ +140%. I can see one clear advantage to trading index options, it seems to reduce the complexity of the trade. When trading any stock, the vast majority will be affected by the movement of the associated index(s). Say trading AMCC, one needs to be aware of the SOX and the .COMP stochastic phase relationships ( or other technicals ) along with the stochastics for AMCC. I have found that the odds are less than optimum if you try to trade a stock if its accumulation phase is lagging the accumulation phase of its index. I have found this to be true as evidenced by backtesting screens and in actual trading. I found that a screen that looks for stocks that are oversold in both Weekly and daily charts returns the highest gains when the picks are timed to coincide with the short 1 to 3 day window where the associated index moves into accumulation. Backtesting shows that picking screen returns outside of this window results in seriously reduced performance. The best and hottest stocks in any sector are up and running at the first hint of accumulation in the associated index. The laggards are dragged along by the bullish sentiment of their peers and often lag far enough behind that by the time the index is becoming overbought the stock is just starting to show small gains. When the index goes into distribution the stock goes down with it cutting the accumulation phase short for the stock. Consequently the gains in the stock were minimal. To optimize returns the entry needs to be timed as close as possible to the first bullish technical moves in the index. With options on Indexs or tracking stocks its not necessary to deal with multiple technical pictures. It also allows for a very personal relationship with the index, trading the same chart over a period of years. Downside is that options can be a much higher risk if you're wrong. JMHO |
| EWZuber 1,373 posts msg #31939 - Ignore EWZuber |
4/30/2004 12:30:49 PM NASDAQ about to test support around the 10 Month MA. at 1930. With the .COMP oversold on daily charts we may see a small oversold bounce but I suspect this is not the near term bottom as the Weekly Chart cycle is solidly in a distribution phase and still has a ways to go. JMHO |
| EWZuber 1,373 posts msg #31943 - Ignore EWZuber |
4/30/2004 5:18:08 PM NASDAQ broke through support at 1930 dropping like a rock, stopped at 1919 to turn and test 1930 as resistance ( easiest to see on the 5 min. chart ) then retest 1919 as short term support. Good support at about 1900 where we have the 50 WK.MA and a little price support from the cycle low formed on 3/22 ~ 3/24. My sim. puts were both in the money as the QQQ broke below 35 today and closed them both for about 190% return each. The Convergent Stochastic Theory was instrumental in being able to predict this precipitous drop in the post of 4/26. Just signed up for a 11 Week options course on line. |
| roca1018 163 posts msg #31945 - Ignore roca1018 |
5/1/2004 6:46:58 AM EwZuber, Could you elaborate on the convergent stochastic entry and exit points? Also, are you familiar with any scans for stocks under accumulation where on balance volume is increasing while price is decreasing? Thanks, Rich |
| txtrapper 548 posts msg #31948 - Ignore txtrapper |
5/1/2004 8:52:36 AM Members; Convergent Stochastic Theory A Yahoo and Google search for "Convergent Stochastic Theory" produced no results. How does one begin to study this unpublished theory? Webster's Entry Word: theory Function: noun Text: 1 a belief, policy, or procedure proposed or followed as the basis of action <an educational system that was based on the theory that men learn best by experience> TxTrapper |
| EWZuber 1,373 posts msg #31958 - Ignore EWZuber |
5/2/2004 10:55:42 PM roca1018 There is a convergence of events for both the entry and exit signals. For an entry it is imparitive that the Monthly and Weekly Charts be in accumulation or has just had a stochastic fast line cross above the slow line indicating the beginning of an accumulation phase. ( The only exception I have found is immediately following a fast line cross below the slow line on Monthly chart. There is usually enough momentum left in the chart for a couple more 'long' trades but risk is increased ). Daily charts need to show a convergence of the fast and slow lines, along with Hourly and 5 Minute charts. It's good to see volume studies either show capitulation or a complete exhaustion of sellers. The Resistance Trendline will break right about where the stochastic fast line crosses above the slow line. Buying volume should follow almost immediately. A Supporting Trendline is drawn from the new uptrend. If this TL is broken draw a horizontal line to the right of this Supporting TL break, this is the primary sell signal. The only possible exception to this rule is when all longer term Stochastic cycles are in strong accumulation and a short term cycle like the 5 min. or 1 HR. chart cycle is already heavily oversold. If the Supporting TL is broken under these conditions on a closing basis ( for the next candlestick in that time frame ) and there is other support like an intraday moving average or other technical pattern very near then it can be worthwhile to wait a bit to see if the stock holds at this MA support and moves back into accumulation soon. If one has no restrictions on trades and one dooes not mind active trading to manage a position then there is no real need to hold when it drops below the horizontal line. This can be used for finding long or short positions. I'm trying to find out what is needed to put up a website so that charts can be posted. A picture is worth a thousand words. |
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