Could it really be this simple???
Posted by MC on Oct 24, 2008
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
So let’s check in with my silver short…
Posted by MC on Oct 5, 2008
I gave warning on a possible silver short setup on the 18th and then on the 25th I gave confirmation. I just had to go back and toot the ole horn because I got alot of flack from the silver bulls. 
Time to look at silver again…
Posted by MC on Sep 25, 2008
Silver is near that 50ma and the top of structure resistance as shown on my chart prior. Silver has shown selling pressure on the prior push and now it’s lingering showing limited buying pressure. For a trader this is a low risk short with a clear and tight stop. As I’ve said before…no bias or silver hating here…just pointing out a obvious and sound trade setup. 
Silver finally gave a bounce but it’s at resistance now…
Posted by MC on Sep 18, 2008
Silver coming into daily resistance. This has been trending so clean I’d be shocked if this zone I drew out didn’t hold. Plus the MASSIVE volume on the paper markets seems to tell me there’s a good chance of a temporary bottom there. Clean resistance, with the trend….good place to try getting short. My strategy would be to enter half at the low resistance and then scale in the other bit if it penetrates into that resistance zone. From there you have a clear stop and a good cost basis.
Good luck
More insight, building on my previous forum posts on context
Posted by MC on Aug 30, 2008
First see http://www.tradersbase.com/forum/technical-analysis/743-some-thoughts-volume-taken-context.html
Trendlines work the same as structure support in their use to see which side is winning the tug-o-war. A candle with a long wick bouncing off support with big volume could give insight that the bulls defended that level with vigor and probably ran stops to cause a spike they used to buy cheap. That same candle with no support causing the bounce would mean alot less in terms of a traders odds. This is why context is so important, the market 9/10 times won’t reverse in the middle of nowhere.
Now small/tight candles at support/resistance shows rotation and balance which I find as important as wicky candles. The more volume, the more rotation came in at that level. Everyone loves BIG candles, but super small candles with big volume are at least as important. If you see a big volume on a tight balanced candle get ready cause bets have been placed by both sides and only 1 can win that move in the end. 
Generally it’s a fade situation because if you’re at support and bears can’t drive it lower bulls stepped in to defend or vice versa at resistance.
Final thoughts for now…
BIG candles regardless of volume = momentum
Go with the flow till it retraces or balances/rotates.
Tight, high volume candles = balance nearing an end
Balance will give way to momentum soon, let the direction show itself then hop on the momo train.
Bulls on parade today, but don’t forget the bigger picture guys!
Posted by MC on Jul 17, 2008
Still plenty of resistance ahead on the markets overall. DJI has no divergence on a weekly going into this move so perhaps the Nasdaq is leading off it’s divergence. Either way Nas has been the stronger market all the way in this bear really. In case some didn’t catch the tip on the charts…there is a nice ticker to help you spot divergence on highs and lows. 
My view of the YM’s bigger picture
Posted by MC on Apr 23, 2008
Here’s my view, we closed above that down channel pretty convincingly. As expected it’s stalling at overhead resistance on low volume, it’s time to base or pullback to test support most likely.
Now ideally we should get a test of the new support on the top down trend line.
Even better would be if it kind of hangs here for a few days and lets that channel line meet with the structure support below. There would be the king of entries if you want odds in your favor, double support for a long. 
Note the red arrow, that’s your signal if your less aggressive and maybe the smartest entry of all. The channels/trendlines break and fake out often but a legit breakout of range followed by a test of that same level is a prime entry. Let’s see if we can get that smarter entry on a long here. You could play it short in anticipation of that test though it could rally with no warning and now I would look for long setups.
