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.

???

A little checkback off that first sublevel, and up it goes to the second. But, will this massive, monster area here stop it, up almost 30 from just yesterday? Imagine if it doesn't...

20 hit! Just uncanny, my pointing this out yesterday, and near the end of the session, too. And now 21.25 and rising strongly. Holy crow.

no! going for the upper line!

My highest line is around 23.25, that the upper, upper bound. This is it.

And yes, I switched from strong long-side bias to short-side bias, intraday, when it hit the area. Perhaps this little checkback is it, and up it goes, to infinity. All I know is, it did exactly as I expected, when I expected it, all posted in advance, and did it with a three push volume climax move. Odds-wise, that just about mandates I go with that, and see what it does. If it doesn't play out, then I just get off it.

BTW, gold dumped hard (well, hard in the very, very short-term) as this started to unfold.

If this can drop any more, I'm watching around 16 and 14 next.

So, what do we figure, AAPL will be trading 425 after today's earnings? I'd think that would be the minimum they'd want it at.

Recall what has happened so far here in every case they've shown. ES down and/or risk basket up.

http://www.zerohedge.com/article/delayed-momo-knee-jerk-reaction-fluff-compromise-breaks-es-risk-correlation

Addendum: As Tyler pointed out, this is a convergence trade, hence the ES could rise, and the risk basket rise faster to get the convergence. So it isn't always ES down and/or risk basket up. But, with gold bleeding like a stuck pig here, it would take quite a snap reversal for ES to rise and the risk basket to catch up. But, I've seen that with gold...

can you believe this?

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?