The week starts out 'interesting'. Gold is only a few cents from the 'magical' $1600 level. I think the only magical level is $10,000, and the musings on when that gets taken out. If it does, and the moves were proportional, that prices gas at the pump around $30/gal and crude around $400. Imagine food prices then. The Swissie is exploding, and the EUR/CHF just set another new record low, as parity is now the talk. And this has our futures down a whopping 1.75 points. Wow, pretty scary, the ES down 1.75 points.

For gold I have a minor area around 1609-19, then a key area around 1630, then another level around 1648-56. It's hard to pinpoint things any better than this right now, until things develop. Above all this I also have a level around 1716-20, but I can't really say much on that until I see how it would get there. The lines up there are harder to come up with...

A little bit of selling in the ES. I can't believe it. I guess it's just a sucker trap for them to get better prices to run it up a whole bunch?

Okay, now shouldn't the ES start rising in here?

He said: 'Let the ES rise, and the ES did rise. And he looked upon the ES, and saw that it was good.'

Now, please, no one take offense at my paraphrasing here. Besides, in this case the 'He' is the scum at Goldman Sucks doing 'god's work', and JPM and the rest, not the 'He' you were thinking.

The .300 is here at 7.75, so I am already watching, but the next level I am really interested in is 8.75-9.50. If it can't get over this .300, then that's really weak.

9.75, now we see. Looking pretty strong. Go back to that first post about the ES starting to rise, look at the timestamp, and mark it on your chart. How did I know, right there, it was about to start? Pretty amazing, huh?

And yes, this could be a bearish ABCD at 9.75, with a TD in the BC leg, albeit a very shallow C point one (something I don't like).

We'll see, but I think it wants to rise further, 11 or more likely 13+.

13+ will have it making back just about all the drop. I'd think they'd like that.

Jim, the one man show. So, it does like that ABCD area. Watch the KZ at key line here for the next clue.

I guess what I am saying is that not every time price hits a line, or lines confluence and price hits them, it's an area that produces a potential trading edge. With experience one can make an attempt at filtering out these areas that just don't have the right look to them. I'm not really talking about subtle, almost invisible variations here, I'm talking about 'obviously has potential', and 'obviously looks totally wrong'. This is frequently something that can be seen by eye real easily, but is very, very hard to program into a computer. I wish I had a chart example off hand for you, but I don't.

Originally posted by tx_ches

Jim, what do you mean when you say "our eyes would say the geometry is not good." How can geometry be bad?

I'm not convinced the algo's are using the same median lines as roofer all the time. On the QQQ's, I drew 2 other sets before I saw roofer's set and even after I drew another set. So all together there were 4 sets with lines going into his areas. The algos could easily have programmed in 2 of them without using the more minor swing low that roofer used.

How heavily do you think the algos rely on measured moves? It seems like I see a lot of median line sets that capture a measured move. I wonder if that is what the algos key on when it is looking like they key on a median line set?