In a bear trend…
Sell high, cover low
OR if you must
Sell low, cover lower.

Ideally short a bear rally to major resistance with a stop at just above that resistance cluster.
OR
Short a breakdown of major support with a stop at just above that support cluster.

In a bull trend…
Buy low, sell high
OR if you must
Buy high, sell higher.

Ideally buy a correction to major support with a stop at just below that support cluster.
OR
Buy a breakout of major resistance with a stop at just below that resistance cluster.

It really is that simple chart wise. We as humans muck it up with getting fancy, looking at the noisy timeframes and trying to out think the market and/or looking for a single level rather than a cluster. If you’re looking for magical levels and there are none. Trade the market structure and you’ll have a clear path as to where your trades should unfold. This technique will also give you the knowledge of risk/reward ratios before you ever risk a dollar of your cash. As for if the clusters work or not…that’s up to the market.

Other thoughts…
Trade with the broad trend to up your odds of a profitable trade.
Keep in mind the S&R clusters given this volatility cover massive ground. This is why I’m cash and not trading futures, I cannot afford a proper stop in this environment. Be smart enough to know what your limitations are both mentally and financially!

Good luck

It’s a disturbing lopsided image to me how we rose so exponentially with no retrace. From the breakout in the early 80’s there has been no real looking back which is not healthy. We had Y2K which was a slight balance period and was treated like the end of the world when it was just a minor blip in the big picture. I almost drew a mid channel line in but it really would blur the reality of this market. And the longer they prop us up here the further and harder the fall will eventually be IMO.

Def keep in mind that this years candle isn’t said and done with. So a yearly chart now is a tad premature. But at some point the market has to come down and probe the channel, it can’t go up exponentially forever fellas. If they prop it up and continue the bubble look to Y2K levels for support and if those fail we will have a Hinderburg type of market bursting.

Not doom n’ gloom, well maybe it is…sort of. If we see coiling or rejection candles at the top of this channel or a break of Y2K lows we know we are in for deep $hit. There will be a massive bear cycle, some estimate it to be 10-12 years long. So we won’t just drop to the base of the channel overnight but at some point I do imagine price action will drive it there.

Good luck boys n’ girls.

The smart money knew the news already IMO…look at the hidden buying Thursday afternoon and again Friday. I’ll refer back to my UVOL/DVOL post…10:1 with flat price action (in relation to that ratio). And there was no other reason for that much volume in the middle of the daily charts range (especially Fridays action).

Think about the 10:1 ratio for a minute. For every 1 buy there was 10 sells? Why did the market not tank 1,000’s of points? This is divergence of massive proportions and why I posted that chart. If you see internals doing crazy things but the price action isn’t following there is something going on. ALWAYS be aware of your internals and surrounding market landscape! To track the animals that are “smart money” you have to look for their footprints in the sand.

http://tradersbase.com/mcs-musings/more-uvoldvol-at-work/index.html

Burn this chart in your mind…this is a flashing warning sign.

Good luck

Why is news a joke? They are attaching news to whatever is moving at that given point, often flip flopped many times a day. This was a real treat though, what would you be here…bear or bull based on this news?

And as said prior 1000x, pros use news to flip shares to the hyped up masses. Essentially the entire market is a pump n’ dump if you think about it. LOL

To provide even more value I have decided to add Market Profile (MP) levels to the premium members blog which I update each night.

It’s going to be open for maybe a week to let you feel the power of these levels. This will give you enough time to donate $ or “donate” quality posts to TradersBASE and secure access to this data. It will also give me time to sort out the subscription module to keep things automated.

I’ve added some more volume by price support lines and updated the chart.
To me this shows the volume and where the majority entered the market after the Y2K bear. Almost 2 years of consolidation setting up the bear to bull transition. No doubt about it…this is [B]THE [/B]key price pocket. Volume = market sentiment and it’s staring us in the face. Now the question is do the big money players have chips on the table still, if so they support that line…if not they let it tank through and get in MUCH below that pocket of support.

The above I posted on the web on Jan. 23rd.
The levels I posted back then are coming up. 10,700 remains the most important level I can see. If we stay above that, the point of control is upheld and long term investors will hold albeit with a load of steamy crap in their pants at this point. If we break below there with conviction (especially close below) I’d look for massive bloodshed to accompany the crap in the pants.
I’m looking at that volume pocket as a fault line, if we break that open it’s going to be like an earthquake when we have plate shifting at the earths core.

Here’s an updated chart. In bell curve terms this is a chance to revert and test the MEAN. This testing is something the market does all the time on different timeframes. It’s how value is probed in a 2 way auction. Goes higher, no interest…revert to the mean and see if there’s interest. If there’s no interest there it goes lower till there is no interest and then back to the mean. From the mean any direction could be tested FWIW, including chopping around and coiling at that section of price. My signature sums up how I feel about market movements.

You start with a basketball from Walmart bought at the reasonable retail price of $10. At some point the owner signs the ball Michael Jordan and claims to be selling a MJ signed ball. The bidding goes up because what was worth nothing and was common, is now all the sudden deemed a rare piece of memorabilia triggering peoples emotions and greed. As the bid goes higher so does the interest in this item, it must be worth even more otherwise why would people be so interested right? The advertised price is now extreme and the original seller, knowing it was a fake, prances away with $990 in profit. Now the new owner only bought it based on his greed, so he turns around to try and sell it for $2000. Only now there is no COA (certificate of authenticity) and people are questioning the validity of the signature. Now his offers are now in the $500 range, because there’s still a slight chance it’s legit and greed tells bidders they could still resell for profit. Fast forward…it’s been exposed a phony signature. The bid collapses and now is back to being worth $10. The owner tucks it away for a few years till he has a garage sale. There someone buys it for $20 despite being told it’s a fake. The seller is just happy to get some money back, and the shady buyer knows the signature is passable. The new owner opens an auction with new naive customers who know nothing of the prior auction. What do ya know, he sells the ball for $1000 again, and the cycle repeats over and over.

Of course there’s allot more in the markets movement than a clear cut point A to point B. This is a simplistic look at things to say the least. One thing to take from this may be that what transpires in the middle is essentially noise and greed driven. The greed portion can linger on for quite some time, as long as the hope of selling for profit is around. Now on the other hand, the extremes of the range often have quick reactions thanks to fear being the stronger of the emotions.

Another reason I feel this is a fair depiction of the market is the fact that the ball holder creates the bag holder. This market is not a fair game, there is deception at work. The “smart money” in the market preys on “dumb monies” greed and fear. “Not fair” some would say, well no, but what in life is fair? LOL

Gold, not all that shiny anymore is it?

We got the blow off top as the first sign of weakness. Now we had sizable volume come in at the resistance of the downtrend and moving average cluster.

Target one would be the structure support line, target two would be the base of the down channel. Pretty tight stop on this guy at probably $963, well worth the risk for the potential downside IMO.

Here is my first post in a new category called MC’s Musings.

Here I will relay all my thoughts on the current state of the market which I usually do with a chart.

I’ve yet to dial in the psych part of MY game but I feel my TA and charting is on par with some high level traders.

I strive to continue to help people profit from the markets which I enjoy doing.

Beware as I sometimes rant as well.