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
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.
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.
Monthly and Weekly look at the DIA which tracks the DOW
Posted by MC on Apr 6, 2008
Long term investing right now could be an incredible place to be, I feel the market has a VERY good shot at breaking into bull trend mode again soon. In January I predicted the 14k dow level to be tested (if not smashed) this year, let’s see how much doom n’ gloom is left and if I’m really crazy. 
Here’s the monthly where we have a nice channel we are in. Why would I call this a correction and not a bear market? Well for one the upwards channel has held up thus far and on top of that the 8ma hasn’t crossed below the 21ma. We have been and are still in a “bear trend” but a bear market to me is not a accurate assessment yet. The 50ma and trend line are acting as confluent support. Note the ATR curling down which is often a sign of bullishness. ATR goes up when emotion is injected in the game by gloomy news to shake people out of shares.
Note the triangle we are in, descending. SO the path of least resistance technically is down. That being said the range is getting tight and much of my other evidence points up. The macd is near crossing for the bulls. Watch for the downtrend line and 21ma along with structure resistance to break. The worst should be over if we can break all those down. The next hurdle will be the 50ma.
The uptrend that’s held so far actually stems back to late 2001. Yes the y2k bear broke the line down but TA is an art. Don’t think that a trendline can’t be broken yet remain valid. Look at how many times we have successfully tested this trendline, that cannot be ignored. Support wise we are backed by the confluent 200ma and trendline. Volume is concentrated at the bottoms which is accumulation, also the volume has decreased as the price has taken out new lows which shows selling could be drying up. On the mini runs the volume is pretty light so it appears they are not flipping and that confirms accumulation IMO. I do my analysis from the top down, starting with monthly and then getting more granular. Why is simple, because look at a daily chart and you will get whipsawed to hell. You need to go out further to reduce the noise on the charts.
Good trading,
MC
