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A pitbull setup


At the request from Max I thought I'd post a little beauty of a setup that I use....It's probably bastardized from somewhere so I won't take complete credit by any means. It is based on a Market divergence between the emini Dow and the emini S&P when they are trading near the extremes of the day ( the highs or the lows) . I will post some basic charts from a demo account ( which sucks because I don't know how to get text on the chart itself) but I won't give away all my secrets..lol...I have traded this method for a long time and some are improving it which is great ... we can also get ideas from some of the great minds on this forum...a few things first 1)I synch the emini dow to start at the same time as the emini S&P...for me that is 9:30 Eastern..I donot display any other earlier dow data....2) I look for the dow to make a new high ( in this example) but not the S&P...then I look to fade...so I will take a short 3) I fade moves and do not play breakouts so in general I sell strength and buy declines..now this may seem too simplistic for most but it is very powerful...The first chart is the emini S&P..Notice the retest of the 10:05 high at 11:10 on lower volume....at this time the Dow actually made a higher high.( see the dow chart)..then the dow again made a higher high at 12:05 too…but look what was happening to the S&P…again not near it;s highs..look at the volume ( or lack of)on the retests..This isn’t a perfect example but it worked for me…...To back test this, the only suggestion I can make is to watch it for a while....

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Now look what happens when the S&P is making new lows on the day but not the Dow...so the setups work in reverse too and can be used as a way to take profits... I have drawn trendlines...these entires can be improved by adding the $Tick index ( hint - Max) or something that works for the individual trader...some like to see what the Nasdaq composite is doing..you can even add an indicator.. .There is a way to utilize this method while we are inside the days range but that will be for another post. Hope somebody can understand this simple yet effective setup. And if I ever become a vendor ( which I won't ) I'll supply you with 7 years of statements or more...lol..
The uncle point is a place where you ( meaning Me) HAVE HAD ENOUGH PAIN , DRAWDOWN OR YOU JUST DECIDE THIS TRADE ISN'T WORKING...for me it usually involves some emotional stress that makes me uncomfortable with the trade..and I am proven wrong in my analysis
quote:
Originally posted by elite trader

Thanks for the clarification. What is an "Uncle" point?

Why is it called an UNCLE POINT? I have never heard that term before.
Referring back to the strategy, the divergence is then confirmed with other market activities such as the NYSE TICK value.
it an older expression...you cry "uncle" when you give up...i think it came from some movie...long ago....where the bully is beating on a kid and asks him to cry out the word "uncle" in order to have the bully stop the beating...perhaps it's a stupid american thing..lol anyway you throw in the towel..like in boxing..you cut your loss and move on
well i am going long at 1427.75.....i won't be turning this into a trade posting thread in case anyone is worried...
Curiosity got the better of me so I went a-googling and found on this page http://www.answerbag.com/q_view/96904
quote:
The exact origin of "say uncle" or "cry uncle," an American invention first appearing in written English around 1918, is unclear, but there are, as usual, some interesting theories. One theory posits that "uncle" is actually a mangled form of the Irish word "anacol," meaning "protection" or "safety," making a demand from an aggressor to "cry uncle" equivalent to the thug demanding that his victim "cry for help" as a signal of surrender. There's no real evidence to support this theory, but there certainly was no lack of recent Irish immigrants in the U.S. around the turn of the century, so it's not entirely implausible.

The other popular theory about "cry uncle" suggests that the phrase may actually be thousands of years old, and that its origins go all the way back to the Roman Empire. According to this theory, Roman children, when beset by a bully, would be forced to say "Patrue, mi Patruissimo," or "Uncle, my best Uncle," in order to surrender and be freed. As to precisely why Ancient Roman bullies forced their victims to "cry uncle," opinions vary. It may be that the ritual was simply a way of making the victim call out for help from a grownup, thus proving his or her helplessness. Alternatively, it may have started as a way of forcing the victim to grant the bully a title of respect -- in Roman times, your father's brother was accorded nearly the same power and status as your father. The form of "uncle" used in the Latin phrase ("patrue") tends to support this theory, inasmuch as it specifically denoted your paternal uncle, as opposed to the brother of your mother ("avunculus"), who occupied a somewhat lower rung in patrilineal Roman society."
well 30 .25 is my first exit and will leave 3 on incase it can go more otherwise stop is at B/E....
Very cool...thanks for digging that up
quote:
Originally posted by elite trader

Curiosity got the better of me so I went a-googling and found on this page http://www.answerbag.com/q_view/96904
quote:
The exact origin of "say uncle" or "cry uncle," an American invention first appearing in written English around 1918, is unclear, but there are, as usual, some interesting theories. One theory posits that "uncle" is actually a mangled form of the Irish word "anacol," meaning "protection" or "safety," making a demand from an aggressor to "cry uncle" equivalent to the thug demanding that his victim "cry for help" as a signal of surrender. There's no real evidence to support this theory, but there certainly was no lack of recent Irish immigrants in the U.S. around the turn of the century, so it's not entirely implausible.

The other popular theory about "cry uncle" suggests that the phrase may actually be thousands of years old, and that its origins go all the way back to the Roman Empire. According to this theory, Roman children, when beset by a bully, would be forced to say "Patrue, mi Patruissimo," or "Uncle, my best Uncle," in order to surrender and be freed. As to precisely why Ancient Roman bullies forced their victims to "cry uncle," opinions vary. It may be that the ritual was simply a way of making the victim call out for help from a grownup, thus proving his or her helplessness. Alternatively, it may have started as a way of forcing the victim to grant the bully a title of respect -- in Roman times, your father's brother was accorded nearly the same power and status as your father. The form of "uncle" used in the Latin phrase ("patrue") tends to support this theory, inasmuch as it specifically denoted your paternal uncle, as opposed to the brother of your mother ("avunculus"), who occupied a somewhat lower rung in patrilineal Roman society."


You are welcome and nice trade!
This is part of the post above but with some charts for clarity...Guy If you want to delete the other one you can or else I will

a nice setup...SP on the lows and dow not making new lows...right about 2pm EST..SP made that new low on low volume and we had a huge down TICK reading at minus 1100 earlier which is big for downside...at about 12:45 and has been making higher lows....since....so the key is synthesizing the setup to what works for you......this is a good setup in general over time and hope it is clear...any questions then just fire them my way and I'll answer it if I know...I have a chart coming of a profile that helped with this..but will get to it later

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Thanks so much for doing that PT. I appreciate it.

Bruce